Strong Results Lift Europe's STOXX 600 To Near Seven-week Highs

European shares scaled near seven-week highs on Wednesday as a string of strong results from companies including Russia-exposed lender UniCredit and Britain's Smurfit Kappa provided some comfort in an otherwise gloomy environment.

The STOXX 600 index closed 0.5% higher, with shares of French IT consulting firm Atos surging 16.2% to top the index on securing financing for a turnaround plan.

UniCredit gained 8.6% after it raised its 2022 outlook and moved ahead with a proposed share buyback it had put on hold, helping Italy's MIB index outperform its peers with a 1.5% climb.

Sentiment also got a lift after an upbeat outlook from Microsoft Corp and strong ad sales growth by Google parent Alphabet Inc overnight, with analysts also pointing out that a lot of disappointment in terms of earnings were already baked into valuations.

"You can argue that much of it was, because through the second quarter we have had a big de-rating pretty much across all markets, there was some degree of disappointment priced in," said Ian Williams, economist and strategist at Peel Hunt.

"It feels maybe now investors are assessing the company updates more on stock by stock basis against the background of concerns about growth, European gas supply and how much tightening the central banks are going to do to try and check off inflationary pressures."

Second-quarter earnings for companies that are part of the STOXX 600 are expected to increase 23.1% from a year earlier, according to Refinitiv. Of the 35% that have reported so far, nearly 60% have topped estimates.

Russia delivered less gas to Europe in a further escalation of an energy stand-off between Moscow and the European Union that will make it harder, and costlier, for the bloc to fill up storage ahead of the winter heating season.

A focus was also on the U.S. Federal Reserve's interest rate hike plans, with markets widely expecting a 75 basis points increase. A statement from the U.S. central bank is due at 1800 GMT, followed by Fed Chair Jerome Powell's news conference.

The travel and leisure sector rose 3%, getting a boost from positive comments from Wizz Air.

The low-cost airline's shares jumped 10.4% after its quarterly revenue more than quadrupled and it said demand for travel was underpinning higher ticket prices.

French payment company Worldline climbed 13.8% on upbeat first-half results.

Smurfit Kappa added 5.5% after Europe's largest paper packaging producer posted a 50% jump in first-half core profit and raised its interim dividend.

Miner Rio Tinto slipped 0.7% after a drop in first-half profit, while Adidas slid 5.1% after cutting its 2022 earnings target, blaming a slower-than-expected recovery in China from pandemic restrictions.