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European stocks edge higher; earnings in focus ahead of BOE decision

Published 05/09/2024, 03:22 AM
Updated 05/09/2024, 03:30 AM
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Investing.com - European stock markets edged higher Thursday, continuing the positive momentum in a week packed with corporate earnings ahead of the latest policy-setting meeting by the Bank of England.

At 03:30 ET (07:30 GMT), the DAX index in Germany traded 0.1% higher, the CAC 40 in France traded 0.1% higher, while the FTSE 100 in the U.K. climbed 0.1%.

China’s trade data helps tone in Europe

European markets have started the session on a positive note, helped by the release of solid Chinese trade data, as a mild increase in exports was largely offset by a substantially bigger-than-expected jump in imports.

The Asian giant is a major export market for a number of major European companies, and signs that domestic demand in the world's second-largest economy is picking up have been received positively.

There is little European economic data to study Thursday, all eyes will be on the Bank of England as the central bank decides its interest rate policy.

Although the BoE is unlikely to cut rates later in the session, investors will be looking out for any hints about the likely timing of the start of its rate-cutting cycle, particularly after Sweden's Riksbank cut rates on Wednesday, which underlined Europe's divergence from the U.S. Federal Reserve. 

The Swiss National Bank cut in March, the European Central Bank has signaled a rate cut in June, while there are doubts the U.S. central bank will actually trim rates this year.

Banco de Sabadell soars on takeover offer

There has been more corporate earnings for investors to digest as the quarterly results season continued.

Telefonica (NYSE:TEF) stock fell 1% after the Spanish telecoms company reported a sharp jump in first-quarter net profit, but maintained its guidance for the full-year, implying a likely slowdown. 

ITV (LON:ITV) stock rose just under 2% after the U.K. broadcasting network forecast an around 12% jump in advertising revenue in the second quarter, four times the level achieved in the first and ahead of expectations, as it expects to benefit from the Euros soccer championship which kicks off in June.

Additionally, Banco de Sabadell (BME:SABE) stock rose 5% after BBVA (BME:BBVA) presented a takeover offer to shareholders of the rival Spanish bank, three days after an all-share merger was rejected by Sabadell’s board.

The offer is an “exceptionally favorable proposal,” BBVA said in a statement. BBVA stock fell 6%.

Crude boosted by China import data

Crude prices rose Thursday, boosted by falling U.S. crude inventories as well as upbeat trade data from China, the largest importer of oil in the world. 

By 03:30 ET, the U.S. crude futures traded 0.6% higher at $79.46 per barrel, while the Brent contract climbed 0.5% to $84.00 per barrel.

U.S. crude inventories dropped last week by 1.4 million barrels, according to data from the Energy Information Administration - something of a surprise after the industry body American Petroleum Institute indicated earlier this week that inventories grew 0.5 million barrels.

Adding to the positive tone was the news that shipments of crude to China, the world’s second-largest economy, in April, were 44.72 million metric tons, or about 10.88 million barrels per day, according to data released earlier Thursday. 

That represented a 5.45% increase from the relatively low 10.4 million bpd imported in April 2023.

Additionally, gold futures rose 0.2% to $2,317.30/oz, while EUR/USD traded 0.1% lower at 1.0738.

 

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