European equities moved higher on Thursday as investors digested a heavy flow of corporate results alongside fresh U.K. economic data.
By 08:10 GMT, Germany’s DAX was up 1%, France’s CAC 40 had added 1.4% and London’s FTSE 100 was 0.4% firmer.
Earnings dominate sentiment
Results from several of Europe’s largest companies for the final quarter of 2025 were in focus. While the outlook for corporate performance has improved somewhat, LSEG data still point to a contraction in fourth-quarter earnings across the region—potentially marking the weakest showing in seven quarters.
“Europe lacks the AI-driven growth engines powering the U.S., but investors are focusing on the cyclical earnings recovery,” analysts at Lombard Odier said in a note. “We expect earnings growth to rise from -3.5 in 2025 to 9% in 2026, slightly below consensus.”
“Almost 25% of corporates have reported, with blended earnings growth – the combination of estimated and reported growth so far – close to 5%. Companies are struggling with the effects of a strong euro and uneven demand.”
Among the day’s movers, Mercedes-Benz Group (TG:MBG) slid after posting a 57% drop in 2025 earnings and a 9% decline in revenue. The luxury carmaker warned that margins in its automotive division could weaken further this year, citing elevated costs, softness in China and global tariff pressures.
By contrast, Hermès (EU:RMS) reported another robust quarter, with fourth-quarter revenue rising 9.8% at constant exchange rates, ahead of expectations for 8.4%. Sales in the Americas climbed 12.1%, outpacing forecasts of around 9%.
Unilever plc (LSE:ULVR) also topped estimates for underlying fourth-quarter sales growth, driven by strong demand for brands such as Dove and Vaseline, although the group cautioned that slower market conditions could weigh on performance in 2026.
British American Tobacco plc (LSE:BATS) posted a 2.3% increase in annual profit as its Velo nicotine pouches gained traction and newer vaping and heated tobacco products expanded sales.
Thyssenkrupp AG (TG:TKA) exceeded expectations in the first quarter, with adjusted EBIT of €211 million, helped by a solid contribution from its Steel Europe division.
Anheuser-Busch InBev (EU:ABI) delivered 7.5% growth in fourth-quarter underlying earnings, surpassing forecasts as all three Americas regions outperformed on both volume and revenue despite subdued consumer spending.
Siemens AG (TG:SIE) lifted its full-year outlook after reporting higher first-quarter orders, revenue and operating profit, reflecting broad-based industrial strength.
In deal news, U.S. asset manager Nuveen agreed to acquire Schroders plc (LSE:SDR) in a transaction valued at just under £10 billion ($13.5 billion), creating a combined entity with close to $2.5 trillion in assets under management.
U.K. economy inches higher
Data released earlier showed the U.K. economy expanded by 0.1% in December, slightly slower than November’s 0.2% pace. Quarterly growth for the final three months of 2025 also came in at 0.1%, unchanged from the previous quarter.
The Bank of England left interest rates unchanged at its first meeting of 2026, following six cuts since August 2024.
In the U.S., January nonfarm payrolls rose by 130,000, beating expectations of 70,000, while the unemployment rate dipped to 4.3% from a projected 4.4%. The figures reinforced expectations that the Federal Reserve will likely keep rates on hold until at least the latter half of the year.
Oil edges up on geopolitical tensions
Oil prices ticked higher amid ongoing friction between Washington and Tehran, fueling concerns over potential supply disruptions.
Brent crude futures gained 0.4% to $69.69 per barrel, while U.S. West Texas Intermediate rose 0.5% to $64.97. Both benchmarks had climbed about 1% on Wednesday as reports suggested the U.S. could deploy a second aircraft carrier to the region.
Although recent talks between Iran and the U.S. hinted at limited progress, no comprehensive agreement has been reached regarding Tehran’s nuclear program, keeping energy markets cautious.
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