European stock markets rose Thursday, as investors digested a deluge of corporate earnings as well as the latest European Central Bank interest rate cut.
At 08:25 ET (13:25 GMT), the DAX index in Germany climbed 0.3%, the CAC 40 in France rose 0.6% and the FTSE 100 in the UK gained 0.6%.
ECB cuts interest rates
European equities were boosted by the decision of the European Central Bank to cut interest rates by 25 basis points earlier Thursday, as policymakers look to address flagging economic growth in the eurozone currency area despite concerns over lingering inflation.
Despite noting that a “disinflation process” is “well on track” and the impact from an era of restrictive monetary policy is gradually fading, the ECB said in a statement that the Eurozone economy is “still facing headwinds”.
Data released earlier Thursday showed that the eurozone economy stagnated last quarter, with gross domestic product in the region unchanged compared with the previous quarter, falling short of expectations for a 0.1% expansion, as two straight years of contraction in Germany weighed on the bloc as a whole.
The ECB slashed borrowing costs four times in 2024, due in part to worries over tepid activity in the eurozone and signs that a generational surge in inflation may have been cooled by a period of elevated rates.
The sentiment was also helped by the release of quarterly results from a number of Megatech companies after the close of the previous session, following the decision of the Federal Reserve to hold interest rates unchanged.
Shell gains after hefty buyback
In the corporate sector, Shell (LON: SHEL) stock rose 1.2% and the energy giant reported a smaller fourth-quarter profit, as the oil major took a hit from lower refining margins and lower liquefied natural gas trading.
The energy giant, however, said it would buy back shares worth $3.5 billion.
The world’s top oil and gas companies have experienced a decline in profits throughout 2024, following record earnings in the previous two years, as energy prices stabilized and global oil demand weakened.
Deutsche Bank (ETR: DBKGn) stock fell 4% after the German lender posted a bigger-than-expected drop in fourth quarter and 2024 full-year profit as legal provisions and restructuring costs eroded revenue gains at its global investment banking division.
H&M (ST: HMb) stock fell 4% after the Swedish fast-fashion retailer reported weaker-than-expected sales for its fourth quarter, but it added sales were up 4% in December and January, indicating a better start to the new fiscal year.
Roche (SIX: RO) stock rose 1.8% after the Swiss healthcare giant said it expects high single-digit growth in core profit for 2025, following a strong performance in 2024 driven by strong sales in both its pharmaceuticals and diagnostics divisions.
Nokia (HE: NOKIA) stock soared 7% after the Finnish telecom company reported strong fourth-quarter growth and profitability, signalling a recovery in market trends after a challenging year.
STMicroelectronics (EPA: STMPA) slumped almost 8% after one of Europe’s largest chipmakers said it expected sales to fall further in the first quarter of 2025, as the downturn seen in its key markets drags on into the new year.
Crude eyes trade tariffs
Oil prices steadied Thursday, but concerns remain over the impact of potential trade tariffs on global growth as well as the likelihood of increased US production.
By 08:25 ET, the US crude futures (WTI) traded 0.1% lower to $72.52 a barrel, while the Brent contract was down 0.1% to $75.52 a barrel.
Oil prices were nursing losses over the past week after US President Donald Trump called for lower oil prices and higher output in the US and other major suppliers, while data showing a build in US oil inventories also weighed.
Markets remained largely skittish over Trump’s plans to impose more trade tariffs on major global economies, especially China.
Investors are also looking ahead to a ministerial meeting by the Organization of the Petroleum Exporting Countries and its allies, together called OPEC+, scheduled for Feb. 3.
