European stocks edged higher Monday, supported by a generally positive earnings season, although holidays in Asia and the U.S. have resulted in subdued activity.
At 05:02 ET (10:02 GMT), the DAX index in Germany climbed 0.2%, the CAC 40 in France gained 0.3% and the FTSE 100 in the U.K. rose 0.2%.
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Solid corporate results boost sentiment
It’s been a quiet start to the week, with Monday being the start of the Lunar New Year holiday in much of Asia and George Washington’s birthday in the United States.
That said, sentiment is generally positive in Europe, as company earnings growth has been improving this reporting season against a tentatively improving economic backdrop.
Companies representing 57% of Europe’s market capitalisation have reported so far, achieving average earnings growth of 3.9% in the fourth quarter, ahead of estimates for a final result of a contraction of 1.1%, according to data from LSEG.
So far, 60% of European companies have beaten earnings expectations, compared to a typical quarter when 54% would beat analyst estimates.
Monday will be relatively quiet in terms of earnings releases, but this week sees numbers from Europe’s four largest mining companies – Rio Tinto (LON:RIO), Glencore (LON:GLEN), Anglo American (LON:AAL) and Antofagasta (LON:ANTO) – at a time when the metals they mine have scaled new price peaks.
Volkswagen (ETR:VOWG) will also be in the spotlight after Manager Magazin reported earlier Monday that the German auto giant plans to cut costs by 20% across all brands by the end of 2028.
In the U.S., the week’s earnings highlight will come from Walmart (NASDAQ:WMT), with the $1 trillion retail giant posting its quarterly results on Thursday, offering a glimpse into consumer spending.
Eurozone industrial production contracted in December
In terms of economic data, the main release in Europe Monday was Eurozone industrial production for December, which showed a contraction of 1.4% on a monthly basis.
British house asking prices were virtually unchanged in February, with the average asking price for newly listed homes falling just £12 to £368,019, following a 2.8% surge in January, according to data from property website Rightmove.
Earlier in the session, Japanese growth data disappointed, with the country’s gross domestic product growing just 0.2% annualised in the December quarter, much lower than forecasts of 1.6%.
The print also showed little improvement in growth after a sharp contraction in the third quarter, which should strengthen Prime Minister Sanae Takaichi’s case for aggressive fiscal stimulus.
Crude prices just lower ahead of key talks
Oil prices were marginally lower Monday in holiday-impacted trade, with the focus squarely on more dialogue between the U.S. and Iran.
Brent futures dropped 0.3% to $67.52 a barrel, and U.S. West Texas Intermediate crude futures fell 0.4% to $62.50 a barrel.
Both contracts slipped between 0.5% and 1% last week after comments from U.S. President Donald Trump that Washington could make a deal with Tehran over the next month drove down prices.
The two countries are due to hold a second round of talks in Geneva on Tuesday after renewing negotiations earlier this month aimed at tackling their decades-long dispute over Tehran’s nuclear program.
Source: Investing.com
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