European equity markets were mixed on Tuesday, with investors sifting through a fresh wave of quarterly results from some of the region’s largest corporates, set against a backdrop of improving global risk appetite.
By 08:05 GMT, Germany’s DAX was down 0.2% and the UK’s FTSE 100 had slipped 0.2%, while France’s CAC 40 was outperforming, up 0.3%.
Global risk appetite improves
Confidence has firmed across global equity markets, supported by a rebound in technology and artificial intelligence-related stocks following last week’s sell-off.
U.S. markets extended their rally for a second consecutive session, with the Dow Jones Industrial Average reaching a new all-time high. In Asia, Japan’s Nikkei 225 closed at a record level after Prime Minister Sanae Takaichi secured a landslide victory in the Lower House.
European indices have also started the year positively, with the DAX and CAC 40 both up more than 2% year to date and the FTSE 100 gaining over 4%, helped by generally supportive corporate earnings.
Earnings updates dominate
The flow of company results continued on Tuesday as the reporting season gathered pace.
Philips (EU:PHIA) delivered a better-than-expected fourth quarter, reporting sales of €5.10bn as the Dutch health technology group benefited from broad-based demand despite the impact of higher tariffs.
Kering (EU:KER) said fourth-quarter sales fell by slightly less than anticipated, as new chief executive Luca de Meo worked to stabilise the luxury group in his first quarter at the helm.
AstraZeneca (LSE:AZN) forecast growth in both revenue and profit for 2026, citing continued demand for its cancer therapies and newer medicines as it expands further in the United States and China.
Barclays (LSE:BARC) reported a 12% rise in annual profit and set out new performance targets through to 2028, as the lender focuses on its core UK market and increased use of technologies such as AI to reduce costs.
On the downside, BP (LSE:BP.) announced it would suspend share buybacks and redirect surplus cash toward strengthening its balance sheet. The move followed a fourth-quarter loss of $3.4bn, compared with a $1.2bn profit in the previous quarter.
UK political uncertainty in focus
The European economic calendar was relatively light, with the main data point showing France’s unemployment rate rising to 7.9% in the fourth quarter from 7.7% in the prior three months.
Investor attention in the UK is likely to remain fixed on domestic politics, as Prime Minister Keir Starmer faces mounting pressure amid ongoing controversy surrounding the appointment of Peter Mandelson as ambassador to the United States.
Anas Sarwar, leader of the Scottish Labour Party, called on the prime minister to resign on Monday, a request Starmer rejected, following renewed scrutiny of Mandelson’s links to the late US sex offender Jeffrey Epstein.
According to Ruth Gregory, deputy chief UK economist at Capital Markets, any replacement of Starmer and/or Chancellor Rachel Reeves could initially push gilt yields higher and weaken sterling. Over the longer term, she said “the most likely longer-lasting influence is a loosening in fiscal policy that leads to higher gilt yields than otherwise and a weaker pound than otherwise.”
Oil edges lower as geopolitical risks persist
Oil prices eased slightly on Tuesday, although tensions between the United States and Iran remained elevated, keeping concerns about potential supply disruptions from the Middle East firmly in place.
Brent crude futures slipped 0.3% to $68.86 a barrel, while U.S. West Texas Intermediate crude fell 0.3% to $64.18 a barrel. Both benchmarks had gained more than 1% on Monday after the U.S. Department of Transportation’s Maritime Administration advised U.S.-flagged vessels to keep their distance from Iranian waters when transiting the Strait of Hormuz and the Gulf of Oman.
Roughly one-fifth of the world’s oil consumption passes through the Strait of Hormuz between Oman and Iran, making any escalation in the region a significant risk to global energy supplies.
The warning came despite signs of progress in recent weekend talks between Washington and Tehran, with both sides agreeing to continue discussions over Iran’s nuclear programme.
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