European stocks inch up on earnings ahead of U.S. inflation data

European stocks hovered below all-time highs on Wednesday, supported by a jump in oil companies and some strong earnings reports ahead of a key U.S. inflation reading.

The pan-European STOXX 600 was up 0.1% as British retailer Marks & Spencer surged 14.8% after exceeding first-half profit forecasts and hiking its full-year outlook.

Siemens spin-off Siemens Energy advanced 1.2% after proposing a 0.10 euros per share dividend on strong free cash flow gains.

But the overall personal & household goods sector fell 0.8%, dragged down by a 4.4% fall in Adidas (DE:ADSGN) after the German sportswear firm trimmed its 2021 forecasts due to sourcing disruptions and a challenging China market.

“We’ve seen strong earnings which have been fuelling rallies over the last few weeks, but there are concerns about firms’ performance towards the end of the year – how this may start to cede and dampen their ability to push higher if prices continue to rise,” said Daniela Sabin Hathorn, markets analyst at IG.

“Until we see a decisive move from central banks to change rates and show strength on their concerns about taming inflation, equity markets are going to remain strong.”

Profits for Europe Inc in the third quarter are expected to increase 60.7% to 104.4 billion euros ($120.7 billion) from a year earlier, new Refinitiv data showed, a slight improvement from last week’s 57.2% growth estimate.

Swiss chocolate maker Barry Callebaut gained 2.9% after raising its dividend on a recovery in its restaurant business despite sluggish growth in the global chocolate market.

Energy stocks outperformed the STOXX 600, gaining 1.0% after oil prices were boosted by industry data showing U.S. crude stocks unexpectedly fell last week. [O/R]

But the sentiment was somewhat weighed down by data that showed China’s factory gate inflation hit a 26-year high in October. U.S. consumer price numbers are due at 1330 GMT

Among other individual stocks, Infineon slipped 0.5% even after the company beat quarterly sales estimates as a global semiconductor shortage drove prices higher.

Online food delivery stocks HelloFresh, Just Eat Takeaway.com and Delivery Hero slipped between 1.3% and 5% after U.S. peer DoorDash said it would buy Finland-based rival Wolt Enterprises OY in a deal valued at about 7 billion euros ($8.09 billion).