By Josie Cox and Tommy Stubbington
European stocks were mixed Wednesday with investors weighing
some further downbeat corporate earnings news against an apparent
easing of tensions in Ukraine.
The Stoxx Europe 600 index closed little-changed at 336.03,
recovering earlier losses after President Vladimir Putin sounded a
more conciliatory tone over the Ukraine crisis. The Russian
President appealed to pro-Russian separatists in southeastern
Ukraine to delay a referendum on independence planned for this
weekend.
Those comments fueled a surge in Russian markets. Moscow's MICEX
stock index closed 3.4% higher, while the ruble strengthened 1.3%
against the dollar to 34.897, a three-month high.
The impact on wider European markets was more muted, although
Germany's DAX--sensitive to events in Ukraine due to the country's
strong trade links with Russia--recovered to close 0.6% higher.
Elsewhere, the U.K.'s FTSE 100 was flat, and Italy's FTSE MIB
tumbled 1.3%, weighed by declining shares in Fiat SpA, after Fiat
Chrysler overnight announced an ambitious five-year plan to boost
the company's global vehicle sales nearly 60% to 7 million by 2018,
even as it disclosed a net loss for the latest quarter.
Investors were also digesting Federal Reserve Chairwoman Janet
Yellen's testimony to Congress. She gave a relatively upbeat view
of the outlook for the U.S. economy, but said her optimism hadn't
changed the Fed's plans to keep short-term interest rates near zero
for the foreseeable future.
In Europe, earnings continued to be patchy.
Deutsche Bank on Wednesday lowered its year-end target for the
benchmark to 355 from 375. European shares should rise this year,
but the "persistent weakness" in corporate profits makes the
previous target look overly ambitious, equity strategists at the
bank said.
French lender Société Générale SA and Danish brewer Carlsberg
A/S both pointed to tensions in Russia and Ukraine as they missed
forecasts Wednesday, in a reminder of how ripples from the Ukraine
crisis can head west.
Société Générale, France's third-largest listed bank by assets,
said a EUR525 million ($731.2 million) write-down on its Russian
business pushed first-quarter net profit down 13% from a year
earlier to EUR315 million.
Carlsberg, meanwhile, trimmed full-year profit guidance and said
it now expects adjusted net profit, as well as operating profit in
Danish kroner, to grow by low single-digit percentages, compared
with its earlier estimate of mid-single-digit percentages, citing a
weak ruble.
In a bid to offset slowing growth in the West, Carlsberg made a
big bet on Eastern Europe in 2008 when it bought the 50% it didn't
already own in Baltika Breweries, the market leader in Russia.
Anheuser-Busch InBev reported strong revenue growth during the
first quarter, though higher financing costs and exchange-rate
swings pushed down the brewer's profit, and Siemens reported a rise
in fiscal second-quarter profit but said new orders fell.
The German engineering group also delivered the latest sign of a
resurgence in merger-and-acquisition activity, announcing that it
will buy most of Rolls-Royce Holdings PLC's civil energy
operations.
Ahead, monthly interest-rate decisions for both the European
Central Bank and the Bank of England are scheduled for Thursday.
Several economists have said that the BOE meeting will be watched
particularly closely in the light of unemployment breaching the 7%
threshold by falling to 6.9% in February, potentially putting the
discussion of rate rises on the agenda.
The ECB, meanwhile, is expected to keep rates unchanged.
In commodities markets, gold fell 1.0% to $1,296.30 an ounce
while Brent crude oil added 0.5% to trade at $107.57 a barrel.
Write to Josie Cox at josie.cox@wsj.com and Tommy Stubbington at
tommy.stubbington@wsj.com