European Stocks Rise as Earnings Season Accelerates
European stock markets moved higher on Thursday as investors assessed a wave of corporate earnings reports and fresh UK economic data.
At 08:10 GMT, Germany’s DAX index advanced 1%, France’s CAC 40 gained 1.4%, and the UK’s FTSE 100 rose 0.4%.
Earnings Reports Dominate Market Focus
A large number of major European companies released fourth-quarter 2025 results, drawing strong investor attention.
According to LSEG data, the outlook for European corporate performance has improved slightly. However, companies are still expected to report a decline in fourth-quarter earnings, potentially marking the weakest stretch in the past seven quarters.
Analysts at Lombard Odier noted that while Europe lacks the AI-driven growth momentum seen in the United States, investors are betting on a cyclical earnings recovery. They forecast earnings growth to shift from a 3.5% contraction in 2025 to around 9% in 2026, slightly below broader market consensus.
So far, roughly 25% of companies have reported results, with blended earnings growth close to 5%. Businesses continue to face headwinds from a strong euro and uneven demand conditions.
Mercedes Struggles as Hermes and Siemens Impress
Mercedes-Benz reported a sharp 57% drop in 2025 earnings, with revenue falling 9%. The automaker also warned that profit margins in its automotive division could decline further, citing high costs, global tariffs, and weak demand in China.
In contrast, French luxury group Hermes delivered stronger-than-expected results. Fourth-quarter revenue increased 9.8% on a currency-adjusted basis, surpassing forecasts of 8.4%. Growth in the Americas, particularly the United States, stood out with a 12.1% increase.
Unilever reported better-than-expected underlying sales growth in the fourth quarter, supported by strong demand for brands such as Dove and Vaseline. However, the company cautioned that softer market conditions could weigh on growth this year.
British American Tobacco posted a 2.3% increase in annual profit, driven by rising market share for its Velo nicotine pouch and stronger sales of vaping and heated tobacco products.
Thyssenkrupp exceeded expectations in its first quarter, reporting adjusted EBIT of €211 million, supported by solid performance in its Steel Europe division.
Anheuser-Busch InBev, the world’s largest brewer, delivered 7.5% growth in underlying fourth-quarter earnings, as all three Americas regions recorded stronger-than-expected volume and revenue gains.
Siemens also raised its full-year outlook after reporting higher orders, revenue, and operating profit in the first quarter, reflecting broad-based strength across its industrial businesses.
Meanwhile, U.S. asset manager Nuveen agreed to acquire UK-based Schroders for just under £10 billion, creating an asset management group overseeing nearly $2.5 trillion in assets.
UK GDP Shows Modest Growth
The UK economy expanded by 0.1% in December 2025, according to data from the Office for National Statistics. This marked a slowdown from November’s 0.2% growth.
On a quarterly basis, GDP also rose 0.1% in the final three months of the year, unchanged from the previous quarter.
The Bank of England kept interest rates unchanged at its first meeting of 2026 after six consecutive rate cuts since August 2024.
Meanwhile, U.S. nonfarm payrolls data showed a stronger-than-expected increase of 130,000 jobs in January, with the unemployment rate falling to 4.3%. The data reinforced expectations that the Federal Reserve may keep rates steady until at least the second half of the year.
Oil Prices Rise on Middle East Tensions
Crude oil prices edged higher as geopolitical tensions between the United States and Iran persisted, raising concerns about potential supply disruptions.
Brent crude futures rose 0.4% to $69.69 per barrel, while U.S. West Texas Intermediate futures gained 0.5% to $64.97 per barrel.
Both benchmarks climbed about 1% on Wednesday, as traders priced in additional geopolitical risk following reports that Washington may deploy a second aircraft carrier to the region.
Although both sides have signaled progress in recent talks, no definitive agreement has been reached regarding Iran’s nuclear activities, leaving energy markets cautious.
