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What’s happening: European stocks settled higher on Thursday, driven by strong corporate results.
What happened: The Eurozone’s STOXX 50 closed at a record high amid hopes of the long ongoing Russia-Ukraine war may be nearing an end.
Nestle and Siemens reported upbeat earnings, providing a boost to European stocks.
Why it matters: Since being sworn into office in January, US President Donald Trump has had several conversations with Russian President Vladimir Putin about resolving the conflict with Ukraine, which started in 2022. In the latest development, Trump announced upcoming peace talks between Putin and Ukrainian President Volodymyr Zelensky, who has so far expressed caution about Russia’s intentions.
On the earnings front, Nestle’s shares rallied more than 6% on Thursday, after the coffee maker reported upbeat sales growth for the year. This also provided a boost to the food and beverages index. Shares of Siemens surged more than 7% after the company reported stronger-than-expected earnings for the first quarter.
Legrand’s shares climbed about 9% after the French company reported better-than-expected full-year results.
However, the oil and gas index declined around 1.5% on Thursday, with shares of Neste tanking around 11% after the Finnish oil refiner reported a decline in quarterly core profits and announced plans to slash around 600 jobs.
Investors also responded to the Eurozone’s industrial production data, which showed a decline by 1.1% in December, compared to 0.4% growth in the previous month. The figure also came in weaker than market estimates of a 0.6% contraction.
The pan-European STOXX Europe 600 Index jumped 1.09% to close at 553.75 on Thursday. The Eurozone’s STOXX 50 climbed 1.75% to 5,500.50, notching its first record-high settlement in 25 years. Autos were among the top performers on Thursday, with shares of Mercedes Benz and Volkswagen closing the session higher.
Meanwhile, Germany’s DAX 40 jumped 2.09% to settle at 22,612.02, also hitting record highs. France’s CAC 40 gained 1.52% to close at 8,164.11, gaining for the fourth straight session and hitting the strongest mark since May 2024.
However, UK stocks bucked the overall trend, with the FTSE 100 falling 0.49% to close at 8,764.72 on Thursday amid a more than 5% decline in Unilever’s stock after the company reported its 2024 results.
What to watch: Investors await the release of data on GDP growth rate (1400 UAE Time) and employment change (1400 UAE Time) today.
The Eurozone economy is expected to expand by 0.9% year-over-year in the fourth quarter, matching the pace of the previous quarter. Analysts expect Eurozone’s employment to increase by 1.1% year-over-year in the fourth quarter, following a 1% rise in the previous quarter.
Context: The CAD/USD forex pair gained on Thursday amid weakness in the US dollar.
Details: The Canadian dollar strengthened against the US dollar on Thursday, extending its recovery after hitting a 22-year low on January 31.
The minutes from Bank of Canada’s latest meeting signalled that prolonged concerns over potential tariffs by the US are likely to negatively impact business investment and lead to higher inflation. This forced central bank officials to refrain from providing forward outlook on interest rates.
The Canadian currency found support following the release of labour market data, which showed that the country’s unemployment rate declined to 6.6% in January.
Weakness in the US dollar provided a boost to the CAD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.6% to 107.31 on Thursday.
However, lower prices of crude oil, one of Canada’s major exports, limited the overall gains for the loonie. WTI crude oil prices slipped around 0.1% to settle at $71.29 a barrel on Thursday.
The CAD/USD rose sharply to reach 1.4195 on Thursday and extended gains this morning. Meanwhile, the S&P/TSX Composite Index added 0.53% to close at 25,698.51 on Thursday.
What to watch: Investors await the release of economic data on Canada’s manufacturing sales (1730 UAE Time), new motor vehicle sales (1730 UAE Time) and wholesale sales (1730 UAE Time) today. Analysts expect manufacturing sales in Canada to grow by 0.6% in December following a 0.8% rise in November, while wholesale sales are projected to grew by 0.1% in December.
Car registrations in Canada, which fell to 160,942 units in November to reach the lowest level since February, are expected to decline further to 153,000 units in December. Concerns over 25% tariffs on steel and aluminium imposed by the US remain in focus, despite Trump delaying tariffs for 30 days.
Other Markets: US trading indices closed higher on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.77%, 1.04% and 1.43%, respectively.
India’s Prime Minister Narendra Modi met with US President Donald Trump at the White House on Thursday, reinforcing the need for peace talks between Russia and Ukraine. The news sent the safe-haven US dollar slightly lower in forex trading this morning.
Indonesia’s residential property prices rose by 1.39% year-over-year in the fourth quarter, easing from the 1.46% surge recorded in the previous quarter, which exerted pressure on the IDR/USD forex pair.
Singapore’s economy expanded by 5% year-over-year in the fourth quarter. This being a deceleration from the 5.7% growth recorded in the previous quarter sent the SGD/USD pair lower in forex trading this morning.
India’s total passenger vehicle sales grew by 3.5% year-over-year to 351,310 units in January, slowing from an 11.4% surge in December, which exerted pressure on the INR/USD forex pair.
Peru’s central bank kept its benchmark interest rate unchanged at 4.75% at its recent meeting, sending the PEN/USD pair higher in forex trading this morning.
Spain’s inflation rate (1200 UAE Time), Russia’s interest rate decision (1430 UAE Time) and inflation rate (2000 UAE Time), India’s bank loan growth (1530 UAE Time), deposit growth (1530 UAE Time) and foreign exchange reserves (1530 UAE Time), as well as US retail sales (1730 UAE Time), export prices (1730 UAE Time), import prices (1730 UAE Time), industrial production (1815 UAE Time), capacity utilization (1815 UAE Time), manufacturing production (1815 UAE Time), business inventories (1900 UAE Time), Baker Hughes oil rig count (2200 UAE Time) and Baker Hughes total rigs count (2200 UAE Time).
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