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* Daimler up on higher Mercedes-Benz sales
* Nokia logs worst day on record after results
* Euro slips after Draghi’s last policy meet (Updates to market close)
By Sruthi Shankar
Oct 24 (Reuters) - With no fireworks from European Central Bank chief Mario Draghi’s last policy meeting on Thursday, encouraging results from German heavyweights and British drugmaker AstraZeneca drove European stocks to their strongest close since January 2018.
Frankfurt shares touched a 16-month high, pushed higher by a 3.4% gain for the world’s largest chemical company BASF after it confirmed its annual outlook even as operating income tumbled 24% in third quarter.
Daimler rose 3.3% after reporting a slight rise in quarterly operating profit, boosted by sales of Mercedes-Benz cars.
Shares of trade-sensitive automakers and chemical companies, which have taken a toll from a bruising U.S.-China trade war and signs of slowing global growth, rose 1.1% and 0.8%, respectively.
The pan-European stocks index rose 0.6% to 397.37, its strongest closing level in over 20 months.
“We’re seeing a bit of blue sky rather than the torrent of negativity that has generally been associated with both automotives and exporters,” said Edward Park, deputy chief investment officer at London-based firm Brooks Macdonald.
“Stock markets are reacting more favourably to those that are beating expectations or at least guiding towards a more positive future.”
Healthcare stocks rose 1.5%, leading gains among the major European subsectors. AstraZeneca jumped 5.6% after lifting its annual drug sales forecast following a surge in revenue from newer cancer treatments.
European markets entered the third quarter earnings season this month in nervous form, with signs that Germany was heading into recession weighing on expectations for growth across the region.
Data on Thursday showed euro zone business activity stagnated in October as demand withered, according to a survey published on Thursday hours before ECB’s Draghi made his swansong appearance.
In response, the euro weakened against the dollar, while eurozone stocks gave up some gains before closing 0.4% higher.
At the last press conference of Draghi’s eight-year tenure, the man credited with saving the euro from collapsing kept the door open to even more easy money, days before he hands the reins over to Christine Lagarde on Oct 31.
The ECB made no new policy moves on Thursday, having decided in September to restart bond purchases at a pace of 20 billion euros per month while also cutting its deposit rate to -0.5%.
“The incoming ECB President, Christine Lagarde, will have plenty on her plate, bearing the weight of Draghi’s legacy with little ammunition left and growing discontent within the Governing Council around the latest QE programme,” Andrea Iannelli, investment director at Fidelity International, said in a client note.
“She will have to use all her political skills to navigate still-troubled waters, amid trade wars and a slowing domestic economy.”
On a sour note, Nokia’s shares recorded their biggest percentage drop on record, plummeting 23.4% after the company cut its 2019 and 2020 profit outlook due to pressure from rivals in the 5G industry.
The telecom maker’s report weighed on Helsinki-listed stocks , which fell 1.5%.
Chipmakers came out with mixed results, with Aixtron and Siltronic reporting a fall in third quarter sales, while Dialog Semiconductor raised its forecast for the third quarter. (Reporting by Sruthi Shankar in Bengaluru Editing by Alexandra Hudson)