Category: Top Story

European equity markets were mixed on Wednesday as investors digested the latest Eurozone inflation figures and looked ahead to key central bank decisions.

Fresh data showed that inflation in the euro area slipped below the European Central Bank’s 2% target in January, helped by lower energy prices and a firmer euro. According to flash estimates from Eurostat, the harmonized index of consumer prices rose 1.7% year on year last month, in line with expectations and down from 2.0% in December.

Core inflation, which strips out volatile items such as energy, food, alcohol and tobacco, edged down slightly to 2.2% from 2.3% in the previous month.

Government bond yields across the region eased modestly after surveys indicated that economic momentum in the Eurozone weakened for a second straight month in January. Final data from S&P Global showed that private sector activity expanded at its slowest pace since September, weighed down by softer growth in services.

The final composite output index came in at 51.3 in January, below both the preliminary estimate and December’s reading of 51.5. While the index remains above the 50 mark—signaling expansion—it points to more subdued growth, albeit for a thirteenth consecutive month.

Attention now turns to central bank meetings on Thursday. The European Central Bank is widely expected to keep interest rates unchanged, with markets focusing on its assessment of the growth and inflation outlook. The Bank of England is also anticipated to leave rates on hold, with any revisions to its economic forecasts likely to be limited.

In equity markets, Germany’s DAX was down 0.4%, while France’s CAC 40 gained 0.9% and the UK’s FTSE 100 rose 1.2%.

On the corporate front, Novo Nordisk (NYSE:NVO) slid sharply in Copenhagen after CEO Mike Doustdar pointed to headwinds from significantly lower U.S. pricing for its blockbuster weight-loss drug Wegovy. Shares in Swiss drugmaker Novartis (NYSE:NVS) also moved lower after the company warned of a decline in profits this year.

Banco Santander (LSE:SAN) fell after the Spanish lender agreed to acquire Webster Financial Corp. in a $12 billion transaction. French bank Credit Agricole (EU:ACA) also dropped following a 39% fall in fourth-quarter profit.

Germany’s Infineon Technologies (TG:IFX) traded lower after announcing plans to step up investment in data-center technology to meet rising demand for artificial intelligence solutions.

On the upside, UK pharmaceutical group GSK (LSE:GSK) advanced after reporting stronger-than-expected fourth-quarter profits. Beazley (LSE:BEZ) shares surged after Zurich Insurance Group reached an agreement in principle on the key financial terms of a potential cash offer for the London-based specialty insurer.

European equities edged modestly higher on Wednesday, with investors weighing a fresh round of corporate earnings while looking ahead to closely watched eurozone inflation data later in the session.

By 08:02 GMT, Germany’s DAX was up 0.2%, France’s CAC 40 had added 0.4%, and the UK’s FTSE 100 was trading 0.3% higher.

Earnings season in focus, UBS stands out

The sharp decline in precious metals seen late last week has stabilised, allowing markets to refocus on the busy earnings calendar. Several large European corporates are due to report in the coming days, keeping company results firmly in the spotlight.

UBS (NYSE:UBS) impressed investors after reporting a 56% jump in net profit, comfortably beating forecasts. The performance was driven by strong contributions from both wealth management and investment banking. The Swiss lender, the world’s largest wealth manager, also said it plans to buy back at least $3 billion of shares in 2026—matching last year’s programme—and signalled an ambition “to do more.”

GSK (LSE:GSK) also drew attention after projecting slower sales growth in 2026 in the first outlook delivered by its new chief executive, Luke Miels. The drugmaker is shifting its strategic focus toward strengthening its pipeline as it prepares for future patent expiries affecting key HIV treatments.

Novartis (NYSE:NVS) said it expects operating profit to fall by a low single-digit percentage in 2026, citing mounting pressure from lower-cost generic competition, including on established products such as heart drug Entresto.

In the banking sector, Banco Santander (LSE:SAN) reported a 12% increase in attributable profit for 2025, marking its fourth straight year of record results, supported by resilient net interest income and record fee generation.

Meanwhile, Crédit Agricole (EU:ACA) posted a 24% drop in fourth-quarter net income after a sizable first-consolidation charge linked to its Banco BPM stake weighed on results, despite record revenues for the year and a proposed dividend increase.

Attention will also turn to Wall Street later in the day, with markets awaiting results from Alphabet (NASDAQ:GOOG) after the close. The group is expected to report a 15.5% rise in revenue to $111.37 billion, with investors keenly focused on its 2026 spending plans, cloud demand outlook and updates on AI capacity constraints.

Eurozone inflation data ahead

Away from earnings, preliminary eurozone inflation figures for January are due later on Wednesday, just ahead of the European Central Bank’s policy decision. Consensus expectations point to headline inflation easing slightly to 1.7% year on year, comfortably below the ECB’s 2% target.

The central bank is widely expected to leave interest rates unchanged at 2% for a fifth consecutive meeting. However, a significant deviation from expectations could unsettle policymakers, who have recently voiced concerns about the euro’s rapid appreciation against the dollar and its potential disinflationary impact.

Oil prices extend gains

Oil prices continued to edge higher, supported by geopolitical tensions between the United States and Iran, which have raised concerns about potential supply disruptions from the region.

Brent crude futures for April added 0.1% to $67.40 a barrel, while West Texas Intermediate rose 0.2% to $63.38. Both benchmarks had climbed nearly 2% in the previous session.

Reports on Tuesday said the US had shot down an Iranian drone approaching a US aircraft carrier in the Arabian Sea, while Iranian gunboats were also observed near a US-flagged tanker in the Strait of Hormuz. The incidents came just ahead of scheduled talks between Washington and Tehran this week, casting doubt over whether the discussions will proceed as planned.

UK equities opened higher, with sentiment improving after AI-related concerns that pressured software stocks in the previous session began to fade. Strength in oil majors, alongside company-specific news from GSK plc (LSE:GSK) and takeover target Beazley PLC (LSE:BEZ), helped lift the benchmark index.

Energy stocks provided the largest boost to the FTSE 100, as BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL) moved higher in line with rising crude prices. Oil markets were supported by escalating tensions between the US and Iran, underpinning gains across the sector. By 0934 GMT, the blue-chip index was up 0.6%, while sterling strengthened 0.1% against the dollar to $1.3710. Elsewhere in Europe, Germany’s DAX slipped 0.5%, while France’s CAC 40 rose 0.4%.

In UK stock-specific news, Beazley shares jumped 8.5% after the insurer received a takeover approach from Zurich Insurance Group valuing the business at about £8 billion. Zurich’s sixth proposal offers 1,335 pence per share, made up of 1,310 pence in cash plus permitted dividends of up to 25 pence for the year ended December 31, 2025, representing a 4.2% increase on its prior bid.

GSK was also in focus after the drugmaker outlined a slower pace of sales growth for 2026. The company expects revenue to rise between 3% and 5% on a constant-currency basis, compared with 7% growth in 2025, while core earnings per share are forecast to increase by 7% to 9%. Vaccine sales are projected to range from a low single-digit decline to “stable.” GSK shares rose more than 1% following the update.

Watches Of Switzerland Group PLC (LSE:WOSG) reported strong third-quarter trading across both the US and UK during the Holiday period, noting that demand for its core luxury brands continues to outstrip supply in both markets.

DCC plc (LSE:DCC) said it delivered solid operating profit growth in its fiscal third quarter, supported by organic growth and the initial contribution from its Austrian acquisition FLAGA, while reiterating its full-year outlook for good profit growth.

Meanwhile, SSE PLC (LSE:SSE) maintained its guidance for 2025/26 adjusted earnings per share of 144–152 pence. The midpoint of the range sits around 2% below market consensus, which the company attributed to mixed weather conditions affecting renewable generation, despite otherwise strong operational performance.

European equity markets were mixed on Tuesday, pausing after a strong rally earlier in the session that had pushed several indices to record levels.

The initial surge was underpinned by calmer conditions in commodity markets, signs of easing trade and geopolitical frictions, and expectations that the U.S. Congress will vote on a spending package to end the government shutdown.

Sentiment was also supported by data showing that French inflation unexpectedly slowed to a five-year low last month, reinforcing the view that euro zone inflation could remain below the European Central Bank’s target for longer this year.

By mid-session, Germany’s DAX was up around 0.3%, while France’s CAC 40 was down 0.2% and the UK’s FTSE 100 had fallen 0.7%.

At the stock level, Fortum Oyj moved lower after reporting 2025 earnings that missed market expectations. Alfa Laval also declined after posting a sequential drop in fourth-quarter margins.

Shares in Publicis Groupe (EU:PUB) slid sharply after the company reported a full-year profit that was lower than the prior year. Akzo Nobel (EU:AKZA) also came under pressure after adjusted EBITDA fell in the fourth quarter amid weak revenue performance.

In London, AstraZeneca (LSE:AZN) shares dropped after the U.S. Food and Drug Administration rejected a subcutaneous version of its lupus treatment, which would have simplified administration.

On the upside, Amundi (EU:AMUN) rallied after reporting stronger-than-expected fourth-quarter net inflows, as clients sought greater diversification within Europe and away from the U.S. dollar.

Meanwhile, Nordex (TG:NDX1) advanced after announcing it had secured a 189MW order from OX2 to supply turbines for the Fagerasen wind farm project in Sweden.

European equities traded modestly higher on Tuesday, supported by a positive finish on Wall Street overnight and signs that the recent selloff in precious metals was short-lived.

By 08:05 GMT, Germany’s DAX was up around 0.8%, France’s CAC 40 had added 0.4% and the UK’s FTSE 100 was edging 0.1% higher.

Calmer metals markets lift sentiment

After several volatile sessions marked by sharp falls in gold and silver prices late last week and over the weekend, global markets appear to have steadied. Precious metals rebounded on Monday, helping restore confidence and pushing the Dow Jones Industrial Average more than 500 points higher, a gain of roughly 1%, on Wall Street.

Broader sentiment was also buoyed after US President Donald Trump announced late Monday that Washington had reached a trade agreement with India, cutting tariffs on Indian goods to 18% from as high as 50%. The deal followed months of negotiations and was widely interpreted as a move toward easing previously strained trade relations.

Publicis in focus

In Europe, attention has returned to the earnings season, with a heavy slate of results from major companies expected this week.

Publicis Groupe (EU:PUB) was among the stocks in focus after a series of strong client wins helped lift fourth-quarter underlying revenue ahead of expectations at the French advertising group. For 2025, Publicis generated €2.03 billion in free cash flow before working capital movements, up 10.6% year on year, and proposed a dividend of €3.75 per share, an increase of 4.2%, to be paid entirely in cash.

French asset manager Amundi (EU:AMUN) also reported a solid set of numbers, posting a 6% rise in adjusted pretax income for 2025 to €1.86 billion. The performance was driven by record net inflows of €88 billion as the group launched a new strategic plan running through 2028.

Elsewhere, Akzo Nobel (EU:AKZA) said fourth-quarter margins improved strongly from a year earlier, as the Dutch paints maker continues to navigate weak demand while pursuing a potential merger with US rival Axalta Coating Systems.

Investors were also digesting a busy earnings calendar in the United States, including results from PayPal (NASDAQ:PYPL), Pfizer (NYSE:PFE) and Marathon Petroleum (NYSE:MPC), ahead of numbers from Advanced Micro Devices (NASDAQ:AMD) due after the close. Sentiment toward AI-related stocks remains fragile following a poorly received update from Microsoft (NASDAQ:MSFT) last week.

French inflation surprises on the downside

Economic data released earlier showed inflation pressures remain muted in France, the euro zone’s second-largest economy. Consumer prices fell 0.3% month on month in January, while the annual rate slowed to just 0.3%, below expectations of 0.6%.

The European Central Bank meets later this week and is widely expected to keep interest rates unchanged at 2% for a fifth consecutive meeting. ECB President Christine Lagarde may face questions on the impact of a stronger euro on inflation, after the single currency briefly rose above $1.20 last week, its highest level since 2021. Although the euro has since eased, it remains more than 2% higher over the past two weeks.

Oil prices ease again

Oil prices moved lower for a second session on Tuesday, as easing tensions between the US and Iran reduced the geopolitical risk premium in crude markets. Brent futures slipped 0.4% to $65.96 a barrel, while US West Texas Intermediate crude fell 0.4% to $61.90.

Both benchmarks had dropped more than 4% in the previous session after President Trump said Iran was “seriously talking” with Washington, signalling a potential de-escalation with the OPEC member. Reuters reported on Monday that Iran and the US are expected to resume nuclear talks on Friday in Turkey.

Additional pressure on prices came from a firmer US dollar, with the dollar index hovering near a one-week high, making dollar-denominated crude more expensive for overseas buyers.

UK equities started Tuesday’s session on a firmer footing, supported by a rebound in metal prices that boosted mining stocks. Broader European markets also traded higher in early deals, outperforming the UK market.

Mining shares led the gains after recovering from the previous session’s sharp sell-off in precious metals. Producers of gold, silver and copper including Fresnillo PLC (LSE:FRES), Antofagasta PLC (LSE:ANTO), Endeavour Mining (LSE:EDV), Anglo American PLC (LSE:AAL), Glencore PLC (LSE:GLEN) and Rio Tinto PLC (LSE:RIO) were all higher shortly after the open.

By 08:39 GMT, the FTSE 100 was trading slightly higher, while sterling gained around 0.1% against the US dollar to 1.3686. European peers showed stronger momentum, with Germany’s DAX up 1.1% and France’s CAC 40 rising 0.6%.

UK roundup

A.G. Barr reports FY25/26 growth

A.G. Barr PLC (LSE:BAG) shares rose 6.1% after the soft drinks group said results for FY25/26 met expectations. Revenue increased by around 4% to £437m from £420m a year earlier, while adjusted operating margin improved to approximately 14.7% from 13.6%. The margin expansion of about 110 basis points helped drive double-digit growth in adjusted profit for the year.

AstraZeneca slips on FDA setback

AstraZeneca PLC (LSE:AZN) shares moved lower after the U.S. Food and Drug Administration rejected the company’s initial application for a subcutaneous injection version of its lupus drug Saphnelo. The group said it has since submitted the requested additional information and is working with the regulator to progress the filing.

Plus500 launches US prediction markets offering

Plus500 Ltd (LSE:PLUS) announced it has entered the US retail prediction markets space with the launch of event-based contracts on its Plus500 Futures platform. The new B2C offering includes products from Kalshi Exchange, with transactions cleared directly through Kalshi Klear LLC.

UK grocery inflation cools

UK grocery inflation eased to 4.0% in the four weeks to 25 January, marking its lowest level since April last year, according to figures from Worldpanel by Numerator. The reading was down from 4.3% previously, offering modest relief for consumers.