ArcelorMittal, the world's largest steelmaker, defied fears of a profit warning yesterday and kept its earnings forecast for this year, helped by deep cost cutting in Europe.

Shares in the firm, which makes 6-7 per cent of global steel, jumped by 7.5 per cent after it posted a smaller than expected fall in first-quarter core profit and said the cost savings and its mining activities would help earnings improve in the coming months.

The $500-billion-a-year industry, a gauge of the global economy, has been hit hard by falling demand from austerity-ravaged Europe and slowing growth in China.

ArcelorMittal said first-quarter earnings before interest, tax, depreciation and amortisation fell 26 per cent year-on-year to $1.56 billion, well above analysts’ forecast of $1.36 billion. – (Reuters)