European shares soar on upbeat corporate earnings

The continent-wide STOXX 600 was 0.8% higher at 492.21 points, inching its way towards the key 500 mark

European shares soared on Wednesday, as a slew of upbeat corporate earnings lifted sentiment, although gains were tempered after heavyweight Novo Nordisk missed estimates for its second-quarter operating profit.

The continent-wide STOXX 600 was 0.8% higher at 492.21 points, as of 0830 GMT, inching its way towards the key 500 mark. All European markets were trading in the green, with most of them notching gains of around 1%.

Among sectors, healthcare was the only one in the red, sliding 0.1%.

Novo Nordisk declined 3.4% after the obesity drugmaker posted quarterly operating profit below expectations and cut its annual profit outlook.

Shares of Roche added 1.6% following a report the Swiss pharmaceutical firm is considering divesting cancer data specialist Flatiron Health.

Corporate earnings took centre stage as investors moved past the risk-off sentiment emanating from fears of a U.S. recession that triggered a global selloff in equities earlier in the week.

Risky assets were higher as positioning is cleaner and dip buyers started to emerge, according to Mohit Kumar, chief economist for Europe at Jefferies.

In the absence of fresh catalysts, markets are consolidating as August is generally a month where relatively light trading volumes are observed.

It is just a case where people do not want to take too many big moves in what is traditionally a weaker period for stocks, according to Chris Beauchamp, chief market analyst at IG Group.

Earnings are taking over a bit now. There's not too many macro drivers and perhaps it is a good thing at the moment, he added.

On the data front, German industrial orders increased by more than forecast in June, providing a glimmer of hope for Europe's biggest economy.

The German benchmark index DAX rose 0.8%.