UPDATE 2-Europe's STOXX 600 marks third month of gains on earnings, recovery hopes

© Reuters.

* AstraZeneca (NASDAQ:AZN) boosts UK's FTSE 100
* Barclays tumbles despite profit beat
* STOXX 600 chalks up 1.8% rise in April
* European economy dips into second technical recession in
Q1

(Updates to market close)
By Sruthi Shankar and Ambar Warrick
April 30 (Reuters) - European stocks ended lower on Friday
after dismal GDP data, but marked a third straight month of
gains on strong corporate earnings and optimism about an
economic recovery from the COVID-19 pandemic.
The pan-regional STOXX 600 index .STOXX fell 0.3%,
hovering below its all-time high, and ending the month 1.8%
higher.
Data showed the euro zone economy dipped into a second
technical recession after a smaller than expected contraction in
the first quarter, but is now set for recovery as pandemic curbs
are lifted amid accelerating vaccination campaigns. The German economy contracted by a greater-than-expected
1.7%, hit by renewed lockdowns, while the French economy grew
more than expected. But strong earnings showed companies in the euro zone were
well on their way to recover from the impact of the pandemic.
AstraZeneca AZN.L jumped 4.3% as the British drugmaker
posted better-than-expected results and forecast second half
growth. Swedish Match SWMA.ST rose 0.7% after the tobacco group
reported a much higher first-quarter operating profit than
expected, helped by growth in its Smokefree product segment. UK
peers British American Tobacco BATS.L and Imperial Brands
IMB.L rose more than 2% each. Broadly, European earnings have come in much stronger than
expected, with a higher than usual 71% of companies beating
profit expectations in the first quarter, according to Refinitiv
IBES data. A third of STOXX 600 companies have published results
so far.
"Expectations are high, companies are beating even these
elevated expectations, and yet the market is responding with
caution," Lewis Grant, portfolio manager at Federated Hermes,
wrote in a note.
"At current valuations, and with much pandemic related
uncertainty remaining, many investors are more concerned about
downside than upside."
Strong earnings from British firms helped the European
retailers sector .SXRP outpace its peers in April with a 6.7%
bounce, while automobile stocks .SXAP lagged as a global
semiconductor shortage hurt production.
Banking stocks .SX7P came under pressure on Friday as euro
zone bond yields eased from their highest level since January
2020. But the sector raced past its peers this week with a near
6% gain, driven by a swathe of strong earnings.
Barclays BARC.L tumbled 7% despite reporting a quarterly
profit that more than doubled, while France's BNP Paribas
BNPP.PA slipped 0.8% on higher costs. Spain's Banco Sabadell SABE.MC jumped 8.7% to the top of
the STOXX 600 after its quarterly profit beat market
expectations, helped by strength in its British unit TSB.