European Shares Inch Higher As Earnings Bring Cheer

European stocks inched higher on Thursday as investors digested a slew of upbeat earnings updates as well as comments by European Central Bank President Christine Lagarde that inflation in the euro zone is heading back towards target.

The pan European STOXX 600 rose 0.6 percent to 487.91 after rising half a percent on Wednesday.

The German DAX gained 0.6 percent, France’s CAC 40 climbed 0.9 percent and the U.K.’s FTSE 100 was up 0.2 percent.

The British pound dipped against its rivals after data showed the U.K. economy slipped into a recession in the fourth quarter — bringing forward prospects of interest-rate cuts.

Data from the Office for National Statistics showed that the U.K. gross domestic product declined 0.3 percent sequentially, following an unrevised 0.1 percent fall in the third quarter. Economists had forecast another 0.1 percent fall for the fourth quarter.

Compared to the last year, real GDP declined 0.2 percent in the fourth quarter, confounding expectations for an increase of 0.1 percent.

With U.K. inflation unexpectedly holding steady in January and the economy slipping into a technical recession, traders are now pricing in 70 bps of cuts from the Bank of England this year, with the first cut expected in June.

In corporate news, Swedish business cloud platform Fortnox soared 14.5 percent after posting Q4 results above expectations.

Continental AG gained 1 percent. The German automotive supplier Continental announced plans to cut 7150 jobs worldwide by 2025.

Auto giant Stellantis NV rallied 3.7 percent on share buyback news.
France’s Renault jumped 6.1 percent after it bounced back into profit in 2023 and posted margin and revenue gains.

Spirits maker Pernod Ricard soared 4.7 percent. The company cut its sales guidance for fiscal 2024 but predicted improved demand in key Chinese and U.S. markets from the second half.

Schneider Electric added 3.4 percent after lifting dividend and predicting increased revenue and earnings this year.

Jet engine maker Safran advanced 3.5 percent after reporting higher revenue and operating profit for 2023.

British energy supplier Centrica climbed 3.8 percent despite reporting a drop in annual profit.

Mining giant BHP fell about 1 percent after it flagged another $3.2 billion impairment in relation to its Brazilian Samarco dam failure, and a $2.5 billion impairment charge for its Western Australia Nickel business.

Commerzbank shares rose 2 percent after the German lender posted Q4 net profit that beat estimates.

After reporting a 55 percent surge in its fiscal 2023 net profit, the bank said it plans to return a total of around 1 billion euros of capital to shareholders.