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European stocks hit 6-week highs, Nestlé shines in mixed results session

By Anisha Sircar and Susan Mathew

Oct 20 (Reuters) – European stocks closed at six-week highs on Wednesday as strong Nestle earnings boosted stocks in food companies, helping offset losses following disappointing earnings reports from firms such as luxury group Kering and the chipmaker ASML.

* The pan-European STOXX 600 index closed 0.3% higher. Oil companies also contributed to the gains thanks to the slight recovery in crude prices.

* Shares in Swiss food giant Nestlé rose 2.7% on an upbeat outlook thanks to strong coffee sales and price hikes that boosted organic revenue 6.5% in the third quarter.

* Europe’s food and beverage index gained 1.7%, up 0.8% from Anglo-Dutch rival Unilever, which will deliver its results on Thursday. The sector had fallen the previous session due to disappointing results from Danone.

* As the third-quarter earnings season progresses, investors are nervous about the impact of higher costs from problems in supply chains and labor shortages, especially at a time when global central banks they plan to withdraw their stimulus measures.

* “The bar (for earnings) set earlier in the year is too high. It’s going to be tough to beat it,” said Anna Stupnytska of Fidelity International.

* Shares in Kering fell 0.6% as sales growth at its flagship fashion brand Gucci fell short of analysts’ expectations due to a sharp slump on its recovery path, especially in Asia.

* TS Lombard downgraded German and French stocks as the strong presence of luxury and auto companies makes them vulnerable to a slowdown in China, although it still holds hope for the region as a whole.

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