European Stocks Edge Up After Powell Comments; UniCredit Jumps

(Bloomberg) -- European stocks edged higher, following Wall Street’s record close on Friday, as Federal Reserve’s Jerome Powell reiterated the market may need to wait beyond March for the central bank to cut interest rates.

The Stoxx 600 Index up 0.2% as of 8:10 a.m. in London. Banks and travel & leisure were the best performing sectors while mining and energy lagged as investors gear up for another busy week of earnings. UniCredit SpA soared as profit beat analyst estimates across the board allowing the bank to boost shareholder returns.

In other earnings highlights, Nordea Bank Abp fell after reporting fourth-quarter earnings and giving new profitability goals, while Delivery Hero shares rose as much as 11% after the German food delivery company’s reassuring pre-released fourth quarter guidance.

Last week, European stocks finished largely flat on concerns over the prospect that rate cuts might have to wait until later in the year. Traders’ bets on a March rate cut have fallen to around 18% from about 48% at the start of last week. While bets for a rate cut in May are now at 61%. 

“The resilience being seen in equity markets, particularly in the US, is surprising given that central banks are signaling that the prospect of early rate cuts is going to have to wait until later in the year, with the last few days forcing a major rethink on the timing of such a move,” said Michael Hewson, chief market analyst at CMC Markets UK.

Several countries including Germany and Italy are set to report PMI figures on Monday. Investors are gearing up for a busy earnings week with UBS set to post results on Tuesday and wind-energy giant Orsted A/S is to pitch its strategic plan to investors on Wednesday. 

SECTORS IN FOCUS:

• Turkish equities, as well as European and some Gulf stocks with business exposure to Turkey, may be active on Monday as Fatih Karahan will replace Hafize Gaye Erkan as central bank governor after her abrupt resignation.

For more on equity markets:

• After Bumper Rally, Dividend Futures Show Strains: Taking Stock
• M&A Watch Europe: Applus, Acerinox, Vivendi, MultiChoice, Casino
• US Stock Futures Little Changed

You want more news on this market? Click here for a curated First Word channel of actionable news from Bloomberg and select sources. It can be customized to your preferences by clicking into Actions on the toolbar or hitting the HELP key for assistance. To subscribe to a daily list of European analyst rating changes, click here.

--With assistance from Michael Msika.

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.