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Jul 26, 2016

European Markets at Close Report on July 26, 2016, by CNBC: Europe Stocks Close Higher After Earnings; Fed in Focus

Arjun Kharpal, Alexandra Gibbs, Katy Barnato

European markets closed higher on Tuesday as traders digested another slew of earnings.

Stock indexes

FTSE FTSE 6722.43 12.30 0.18% 521488013
DAX DAX 10236.63 38.39 0.38% 61314513
CAC CAC 4390.37 2.37 0.05% 69181547

IBEX 35 Idx 8559.30 -16.40 -0.19% 153286576
The pan-European STOXX 600 was up around 0.2 percent.
The U.K. FTSE 100 was roughly 0.3 percent higher, the French CAC 40 was up 0.2 percent and the German DAX index was 0.6 percent higher.
U.S. stocks traded in a narrow range as Wall Street companies posted second-quarter results and oil prices fell. WTI crude futures for September fell below $43 per barrel on Tuesday.

Earnings in focus

Earnings season continued in full swing on Tuesday.
Oil major BP announced second-quarter profit of $720 million on an underlying replacement-cost basis, down from $1.3 billion in the same period of 2015. BP said it had "drawn a line under the material liabilities for Deepwater Horizon" which have cost the company $61.6 billion. Shares trade lower, amid an overall decline in the oil and gas stocks, due to the fall in the oil price in recent days.
In France, tire maker Michelin reported a 9 percent rise in first-half profit despite a fall in sales, helped by cost-cutting measures, sending shares higher.
Telecoms firm Orange saw shares fall, however, despite reaffirming its 2016 full-year guidance after reporting a steep rise in net profit, thanks to the sale of its 50 percent stake in EE to BT.
Meanwhile, fund manager Man Group was in negative territory after it said its half year pre-tax profit fell 66 percent year-on-year, while its funds under management fell 3 percent.

AB InBev raises SABMiller offer

In other corporate news, brewing giant Anheuser-Busch InBev raised its buyout offer for rival SABMiller, offering £45 ($59) per share, up from its previous offer of £44 per share. This follows a fall in the value of the pound.
British regulators proposed that Openreach, the BT unit that runs the U.K.'s broadband infrastructure, should become a separate company with its own board, but stopped short of saying Openreach should be separated from BT entirely. BT shares rallied on the news. Rival operators had accused BT of stifling investment in broadband and holding back competition.
In Italy, broadcaster Mediaset said Vivendi no longer wanted to buy all of its pay-TV unit, as agreed in April. The news sent Mediaset shares tumbling as much as 10 percent.

Commerzbank declines

Banks remained in focus. Shares of Gemany's Commerzbank declined sharply after it reported a fall in second-quarter operating profit and a drop in its capital buffer.
Shares of Banca Monte dei Paschi di Siena (BMPS) erased early losses on Thursday, ahead of the European Central Bank's stress tests this week. While it is not a pass-or-fail test, BMPS is expected to be one of the worst performers.
However, Italy's finance minister, Pier Carlo Padoan told CNBC earlier this week there was "no banking problem" in Italy.

Fed, Bank of Japan in focus

The U.S. Federal Reserve Open Committee kicked off its two-day monetary policy meeting on Tuesday. Analysts expect the central bank to hold interest rates unchanged in July and possibly for several months to come.
Manulife Asset Management's Geoff Lewis told CNBC on Tuesday the Fed might postpone raising rates until the first half of 2017, as uncertainty around the upcoming U.S. presidential election and the Brexit vote linger.

Investors will switch focus on Thursday to the Bank of Japan, which will then start its own two-day monetary policy meeting