By Peter Nurse
Investing.com - European stock markets traded higher Wednesday, continuing the strong start to the new month, helped by impressive quarterly earnings from U.S. tech giant Alphabet (NASDAQ:GOOGL).
By 4:05 AM ET (0905 GMT), the DAX in Germany traded 0.4% higher, the CAC 40 in France climbed 0.3%, the U.K.’s FTSE 100 rose 0.7%, while the pan-European STOXX 600 index climbed 0.7%.
Market gains in Europe are consistent with the positive momentum seen globally as investors attempt a comeback after a dismal January, when the Stoxx 600 index dropped almost 4%. That was its worst month since October 2020.
Spectacular fourth-quarter earnings from Google parent Alphabet, released late Tuesday, set the tone Wednesday. The company reported record quarterly sales as its internet advertising business surged on consumers using Google search and advertisers lifted their marketing budgets.
The corporate news has also largely been positive in Europe.
Vodafone (NASDAQ:VOD) stock climbed 2.9% after the telecommunications company said it was on track to meet its full-year guidance, reporting a 2.7% rise in third-quarter group service revenue. It enjoyed growth in both Europe and Africa.
Novo Nordisk (NYSE:NVO) stock rose 3.1% after the Danish drug developer said it aims to generate sales growth of between 6% and 10% in local currencies in 2022.
Santander (MC:SAN) reported a surge in fourth-quarter net profit, but its stock fell 1.1% as the Spanish bank relied on lower loan loss provisions for its positive results, comparing unfavorably with some of its regional rivals.
Novartis (SIX:NOVN) stock fell 1.3% after the Swiss drugmaker’s CEO said it hasn't ruled out keeping its off-patent drugs unit Sandoz. This follows a Bloomberg report released late Tuesday saying that private equity firms Blackstone (NYSE:BX) and Carlyle Group (NASDAQ:CG) were in talks about potentially jointly bidding for the unit.
Elsewhere, Ocado (LON:OCDO) stock soared over 7% after Credit Suisse lifted its investment stance on the U.K. online supermarket all the way to “outperform” from “underperform”. The stock, an early pandemic winner, had fallen over 50% from its peak in January 2021 as of Monday's close.
Away from the earnings season, investors will be keeping a cautious eye on developments in Eastern Europe, with the West continuing to threaten hard-hitting sanctions if Russia decides to invade Ukraine and the Kremlin denying it plans to do so.
Austria’s Raiffeisen Bank (VIE:RBIV) on Wednesday became the first large European lender to say it’s setting aside money to deal with the potential fallout from the crisis.
The main data release in Europe will be the annual CPI number for the Eurozone. This is expected to fall back to 4.4% in January from 5.0% in December, providing some relief for the European Central Bank.
Oil prices traded higher Wednesday, climbing towards last week’s seven-year highs after a drop in U.S. stockpiles suggested continued demand in the world’s largest energy consumer.
The industry-funded American Petroleum Institute said U.S. inventories fell by 1.65 million barrels last week, compared with an expected increase of 1.5 million barrels.
Attention will turn later in the session to the meeting of the Organization of the Petroleum Exporting Countries and allies led by Russia, a group known as OPEC+, to discuss future production levels, as well as the release of the official U.S. inventory levels from the Energy Information Administration.
By 4:05 AM ET, U.S. crude futures traded 0.3% higher at $88.50 a barrel, while the Brent contract rose 0.3% to $89.42. Both benchmarks hit their highest levels since October 2014 at the end of last week.
Additionally, gold futures fell 0.1% to $1,798.95/oz, while EUR/USD traded 0.2% higher at 1.1288.