Aug 3 - Record earnings updates from oil giant BP, banks and others drove European stocks to record highs on Tuesday even as concerns lingered over rising Delta variant cases and China's regulatory moves.
After a hesitant start, the region-wide STOXX 600 index rose to hit an all time high in morning trading.
Oils were the top gainers as BP rose 2.9% after it ramped its dividend and lifted stock buybacks on the back of a stronger quarterly profit to $2.8 billion.
French lender Societe Generale gained 5.5% after it lifted its profit forecast for the full year, while the UK-listed Standard Chartered gained 1.0% after it reported a higher than expected first half profit.
Second quarter earnings have been strong with 66% of the more than half of STOXX 600 companies that have reported so far topping analysts' profit expectations, according to Refinitive IBES data.
Despite concerns about rising COVID - 19 cases globally and higher inflation, European stocks are trading at record levels as investors rotate into the economy-linked cyclical sectors such as financial and industrials with a nascent recovery continuing.
Momentum stocks currently traded at an exceptionally large discount to both growth stocks and the European broad market, analysts of BCA Research wrote in a note.
They recommend investors move into industrial equities which are poised to benefit from the rise of global capex and excess money supply growth.
Chinese tech giant Tencent fell 5.3%, while Dutch company Prosus, which has a stake in Dutch companies Evolution, Ubisoft and Embracer fell between 1.6% and 3%.
The tech sector was among the biggest drags after manufacturer Infineon Technologies fell 1.5% as it said it was facing extreme tightness in its markets.
BMW slid 3.8% even after raising its profit forecast for 2021 as it said the global chip shortage and rising raw materials prices would hurt its performance in the second half of the year.
On the other hand, car manufacturer Stellantis rose 4.4% after it raised its full-year target on its adjusted operating profit margin.
The world biggest container shipping company, A.P. Moller-Maersk, higher after it lifted its full-year earnings outlook as chaotic conditions in the global supply chain pushed freight rates up 1.3%.