European shares edged up on Wednesday, helped by estimate-beating corporate results, and extended a sideways move that was trapping the market as investors awaited greater clarity on the extent of the economic slowdown and the policy response to it.
The European earnings season extended a stronger-than-expected start as the world's largest chip equipment maker, ASML, leading Nordic bank Nordea , and Norwegian fertiliser company Yara International all reported better-than-expected results.
European companies that have reported results so far have beaten consensus forecasts by an average 14 percent, although expectations were low after analysts had cut their earnings estimates for the next 12 months by 3.6 percent in the past 90 days on the back of deteriorating macroeconomic data, Thomson Reuters Starmine data showed.
We have seen some pretty aggressive cuts from analysts over the past 12 months (and) people expect earnings to come down even more aggressively than consensus numbers are suggesting, Peter Sullivan, a strategist at HSBC, said.
Any stabilisation in European macro indicators would be a very positive catalyst for the market.
The upbeat results helped offset investor disappointment at the lack of any hint of imminent monetary stimulus from Federal Reserve Chairman Ben Bernanke during Congressional testimony on Tuesday, although Bernanke kept the door open for more easing if needed.
The pan-European FTSEurofirst 300 index was up 0.2 percent at 1043.08 points at 1058 GMT. Trading volume was thin at 29 percent of the index's 90-day average.
Credit Suisse was top of the European table as it announced capital-bolstering moves aimed at complying with demands by the Swiss central bank and restoring investor confidence after the shares had fallen to a 20-year low.
The Swiss group's stock was up 4.8 percent - in heavy volume at 141 percent of the stock's full-day average - after shedding 10 percent in little over a month.
On the flip side, the world's leading mobile telecoms equipment manufacturer, Ericsson, shed 3.7 percent as its second-quarter results showed a sharp drop in sales of networks due to the slowing global economy.
CHARTS 'CAUTIOUSLY BULLISH'
Charts on the euro zone Euro STOXX 50, up 0.2 percent at 2,254.63 points, pointed to a cautiously bullish scenario, according to Philippe Delabarre, an analyst at Trading Central.
'Bullish' because prices are supported by an uptrend and the 50-simple moving average remains ascending, he said.
'Cautiously' because a rising wedge is taking shape. A push below 2,242 would confirm this pattern and negate the bullish dynamic. A consolidation would take place towards 2,232 and 2,215.
The index had been stuck in a 2 percent range for nearly two weeks between around 2,223 points and 2,264 points, the 23.3 percent and 38.2 percent Fibonacci retracements of its June 1-July 5 rise.