Investing.com – European stocks traded in a mixed fashion Tuesday, as investors digested a deluge of quarterly earnings from some of the continent’s largest companies against the backdrop of generally positive global sentiment.
At 03:05 ET (08:05 GMT), the index in Germany dropped 0.2% and the in the U.K. fell 0.2%, while the in France gained 0.3%.
Sentiment bounces back globally
Confidence has returned to the global equity markets, helped by the recent rebound in technology and artificial intelligence-related stocks after last week’s sell-off.
The major indices on Wall Street recorded a second straight day of gains, with the blue chip hitting a fresh all-time high. In Asia, Japan’s closed at a record high, in the wake of Prime Minister Sanae Takaichi’s landslide victory in the Lower House.
Back in Europe, the major indices have recorded gains so far this year, with the DAX and CAC 40 both over 2% and the FTSE 100 over 4% higher, boosted by generally positive earnings.
Earnings continue to flow
There are more quarterly results for investors to digest Tuesday, as the quarterly earnings season proceeded apace.
(AS:PHG) posted a stronger fourth quarter than expected, as the Dutch health-technology group generated €5.10 billion in sales, helped by broad-based demand despite higher tariffs.
(EPA:PRTP) reported on Tuesday a slightly smaller-than-expected drop in fourth-quarter sales, as new CEO Luca de Meo, in his first quarter, battled to stabilise the luxury house.
(LON:AZN) forecast profit and sales growth in 2026, betting on demand for its cancer treatments and newer drugs as the pharmaceutical giant pushes expansion in the United States and China.
(LON:BARC) said its annual profit increased 12% and announced new performance targets out to 2028, as the lender aims to improve returns by focusing on its core home market and using technology such as AI to cut costs.
On the flip side, (LON:BP) said it would suspend share buybacks and allocate excess cash to strengthen its balance sheet, as the energy giant reported a fourth-quarter loss of $3.4 billion, compared with a profit of $1.2 billion in the previous quarter.
Prime Minister Starmer under pressure
The economic data slate is largely empty in Europe, save for the climbing to 7.9% in the fourth quarter, up from 7.7% the previous three months.
That said, a lot of investors’ attention is likely to be on the political situation in the U.K. as Prime Minister Keir Starmer battles for his future amid continued controversy over the appointment of Peter Mandelson as ambassador to the United States.
Anas Sarwar, leader of the Scottish Labour Party, called for the prime minister to resign on Monday, which Starmer declined to do, because of the selection of a man whose close ties to the late U.S. sex offender Jeffrey Epstein have come into full focus.
Should Starmer, and/or Rachel Reeves, be replaced as Prime Minister and Chancellor, gilt yields initially rise and the pound weakens, according to Ruth Gregory, Deputy Chief UK Economist at Capital Markets.
However, “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.”
Middle East tensions remain elevated
Oil prices lipped marginally lower Tuesday while relations between the U.S. and Iran remained fraught, keeping risks of supply disruptions from the Middle East elevated.
Brent futures dropped 0.3% to $68.86 a barrel, and U.S. West Texas Intermediate crude futures fell 0.3% to $64.18 a barrel.
The benchmarks rose more than 1% on Monday after the U.S. Department of Transportation’s Maritime Administration advised U.S.-flagged vessels to stay as far away from Iranian territory as possible when passing through the Strait of Hormuz and Gulf of Oman.
About a fifth of the oil consumed globally passes through the Strait of Hormuz between Oman and Iran, making any escalation in the area a major risk to global oil supplies.
The warning was issued even as the countries marked progress during recent weekend talks and vowed to engage in more discussions over Tehran’s nuclear program.