European Stocks Close On Firm Note

(RTTNews) - European stocks closed higher on Thursday with traders indulging in some strong buying, cheering corporate earnings updates, and betting on hopes the Federal Reserve and the Bank of England will cut interest rates in the second quarter.

The pan European Stoxx 600 gained 0.68%. The U.K.'s FTSE 100 ended 0.38% up, while Germany's DAX and France's CAC 40 climbed 0.6% and 0.86%, respectively. Switzerland's SMI advanced 0.63%.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Iceland, Netherlands, Norway, Portugal, Russia, Spain, Sweden and Turkiye closed higher.

Greece ended weak, while Poland settled flat.

In the UK market, Croda International climbed 4%. Kingfisher, Natwest Group, Fresnillo, Coca-Cola, Pearson, Centrica, Prudential, Severn Trent, ICP, Rolls-Royce Holdings, United Utilities, St. James's Place, Segro, Vodafone and Ocado Group gained 2 to 3%.

Imperial Brands drifted down 3%. BP ended 1.7% down, while Royal Dutch Shell and Marks & Spencer ended lower by about 1.4% and 1.2%, respectively.

In the German market, Commerzbank rallied more than 5% after the lender posted Q4 net profit that beat estimates. After reporting a 55% surge in its fiscal 2023 net profit, the bank said it plans to return a total of around 1 billion euros of capital to shareholders.

Vonovia gained about 3%, while Mercedes-Benz, Zalando, Daimler Truck Holding, BMW, Infineon, Puma, Siemens Healthineers, BASF, Volkswagen and Siemens gained 1 to 3%.

Siemens Energy ended down 1.8%. Fresenius Medical Care, Porsche, Adidas and SAP also closed weak.

In Paris, Renault climbed more than 6.5% after it bounced back into profit in 2023 and posted margin and revenue gains. Stellantis surged 5.3% on share buyback news.

Safran gained 4.2% after reporting higher revenue and operating profit for 2023. Pernod Ricard gained more than 2.5% after the company cut its sales guidance for fiscal 2024 but predicted improved demand in key Chinese and U.S. markets from the second half.

Saint Gobain, Bouygues, Unibail Rodamco, Hermes International, Kering and L'Oreal gained 1.6 to 3%. Schneider Electric gained more than 1.5%. after lifting dividend and predicting increased revenue and earnings this year.

Essilor, Michelin, TotalEnergies and Airbus Group ended down 1 to 1.5%.

Data from the Office for National Statistics showed that the U.K. gross domestic product declined 0.3% sequentially, following an unrevised 0.1 percent fall in the third quarter. Economists had forecast another 0.1% fall for the fourth quarter.

Compared to the last year, real GDP declined 0.2% in the fourth quarter, confounding expectations for an increase of 0.1%.

With U.K. inflation unexpectedly holding steady in January and the economy slipping into a technical recession, traders are now pricing in 70 bps of cuts from the Bank of England this year, with the first cut expected in June.

The euro area economy is projected to recover slowly this year but inflation is expected to decelerate notably on falling energy prices, the European Commission said in its Winter interim forecast.

The single currency bloc is forecast to expand only 0.8% this year, which was down from the Autumn forecast of 1.2%. The growth projection for 2025 was trimmed to 1.5% from 1.6%.

The EU said the region entered 2024 on a weaker footing. Prospects for the first quarter remain subdued although the economy narrowly escaped recession in the second half of 2023. However, the conditions for a gradual acceleration of economic activity this year appear to be still in place, the EU said.

The inflation projection for 2024 was lowered to 2.7% from 3.2%. Meanwhile, the forecast for next year was retained at 2.2%.

Germany's real GDP is forecast to expand 0.3% in 2024, down from the previous forecast of 0.8%. The estimate for 2025 was retained at 1.2%.

In 2024, France GDP is expected to grow moderately, by 0.9% annually, which implies a downward revision of 0.3 percentage points. GDP growth is forecast at 1.3% in 2025, marginally below the autumn forecast of 1.4%.