European Stock Markets Rise Amid Easing Yields and Earnings Season
European stock markets experienced an uptick on Tuesday morning, reflecting an improved risk sentiment and a decrease in local and U.S. sovereign yields. This movement comes as investors await a new set of macroeconomic data scheduled for release throughout the week, while also keeping a close eye on the commencement of the earnings season.
As of 7:07 AM (Brasília time), the pan-European Stoxx 600 index rose by 0.51%, reaching 511.27 points. After two consecutive sessions of declines and rising sovereign bond yields, European markets are showing signs of recovery.
According to analysts at Deutsche Bank, the increase in market optimism is partly attributed to expectations regarding the gradual implementation of tariffs by the Trump administration, following a report released by Bloomberg on the previous evening.
The European agenda is relatively light, prompting investors to focus on the upcoming release of the U.S. Producer Price Index (PPI) and statements from two Federal Reserve officials, Jeffrey Schmid from Kansas City and John Williams from New York. Additionally, attention is directed towards tomorrow's industrial production data from the Eurozone.
By 7:20 AM (Brasília time), the Paris Stock Exchange led the gains among European exchanges, with the CAC 40 index climbing by 1.01%. French investors are eagerly awaiting a speech from Prime Minister François Bayrou, expected later today, where he is anticipated to outline the fiscal budget plans for 2025. This presentation may include elements of a compromise to temper pension reforms in exchange for support from left-wing factions.
Luxury goods companies have significantly contributed to the rise in European markets, following a report from Italian fashion house Brunello Cucinelli, which exceeded revenue expectations for the fourth quarter despite a backdrop of declining demand. This has heightened interest in the ongoing earnings season across the continent.
At the time mentioned, Brunello Cucinelli's shares rose by 1.65% in Milan, while LVMH's shares increased by 1.87% and Hermes' shares by 1.19% in Paris. The FTSE MIB index in Milan saw a gain of 0.92%.
In London, the FTSE 100 index recorded a modest rise of 0.16%, fluctuating near stability, hindered by commodity-related stocks. BP's shares fell by 2.97% after the oil giant, along with its peers, revised down its projections for fourth-quarter results.
Meanwhile, in Lisbon, the PSI 20 index increased by 0.42%, and the IBEX 35 in Madrid climbed by 0.49%. The DAX index in Frankfurt recorded a gain of 0.75%.
