European stocks hit record on strong earnings
What’s happening: European stocks settled higher on Thursday, driven by strong corporate results.
What happened: The Eurozone’s STOXX 50 closed at a record high amid hopes of the long ongoing Russia-Ukraine war may be nearing an end.
European stocks hit record
Nestle and Siemens reported upbeat earnings, providing a boost to European stocks
Why it matters: Since being sworn into office in January, US President Donald Trump has had several conversations with Russian President Vladimir Putin about resolving the conflict with Ukraine, which started in 2022. In the latest development, Trump announced upcoming peace talks between Putin and Ukrainian President Volodymyr Zelensky, who has so far expressed caution about Russia’s intentions.
European Stocks
On the earnings front, Nestle’s shares rallied more than 6% on Thursday, after the coffee maker reported upbeat sales growth for the year. This also provided a boost to the food and beverages index. Shares of Siemens surged more than 7% after the company reported stronger-than-expected earnings for the first quarter.
Legrand’s shares climbed about 9% after the French company reported better-than-expected full-year results.
However, the oil and gas index declined around 1.5% on Thursday, with shares of Neste tanking around 11% after the Finnish oil refiner reported a decline in quarterly core profits and announced plans to slash around 600 jobs.
European equitiesrising
Investors also responded to the Eurozone’s industrial production data, which showed a decline by 1.1% in December, compared to 0.4% growth in the previous month. The figure also came in weaker than market estimates of a 0.6% contraction.
The pan-European STOXX Europe 600 Index jumped 1.09% to close at 553.75 on Thursday. The Eurozone’s STOXX 50 climbed 1.75% to 5,500.50, notching its first record-high settlement in 25 years. Autos were among the top performers on Thursday, with shares of Mercedes Benz and Volkswagen closing the session higher.
Meanwhile, Germany’s DAX 40 jumped 2.09% to settle at 22,612.02, also hitting record highs. France’s CAC 40 gained 1.52% to close at 8,164.11, gaining for the fourth straight session and hitting the strongest mark since May 2024.
However, UK stocks bucked the overall trend, with the FTSE 100 falling 0.49% to close at 8,764.72 on Thursday amid a more than 5% decline in Unilever’s stock after the company reported its 2024 results.
What to watch: Investors await the release of data on GDP growth rate (1400 UAE Time) and employment change (1400 UAE Time) today.
The Eurozone economy is expected to expand by 0.9% year-over-year in the fourth quarter, matching the pace of the previous quarter. Analysts expect Eurozone’s employment to increase by 1.1% year-over-year in the fourth quarter, following a 1% rise in the previous quarter.