European Stocks Rise as Investors Await BoE Rate Decision and Earnings Reports

European stock markets advanced on Thursday, with investors keeping a close watch on the Bank of England’s (BoE) upcoming rate decision and digesting a wave of corporate earnings reports.

• Germany’s DAX: +0.8%
• France’s CAC 40: +0.6%
• UK’s FTSE 100: +1.2%

Bank of England Expected to Cut Rates

• The BoE is expected to cut interest rates later today, marking its first rate cut of 2025 and only the third cut since the start of the COVID-19 pandemic in 2020.
• In contrast, the European Central Bank (ECB) has already reduced rates five times since mid-2024.
• The UK’s Bank Rate currently stands at 4.75%, the highest among major economies, yet the British economy has struggled, with stagnant growth since mid-2024.
• Investor concerns include:
  • Chancellor Rachel Reeves’ tax hikes on employers.
  • Global trade war risks driven by Donald Trump’s tariff policies.
• Inflation concerns may limit how much guidance BoE Governor Andrew Bailey can provide for future rate cuts, despite markets pricing in 80 basis points of easing by the end of 2025.

Meanwhile, in the Eurozone, retail sales data for December showed a 0.2% decline, indicating that consumer demand remains weak.

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European Corporate Earnings Highlights

ING Group (AS:INGA)

• Stock fell 2.7% after reporting a 21% drop in Q4 profits, impacted by:
  • Higher operating expenses
  • Increased loan loss provisions
  • Interest margin normalization

Societe Generale (OTC:SCGLY)

• Stock soared 9% after the French bank doubled its Q4 profit, driven by:
  • Recovery in retail banking
  • Strong equity market trading performance

AstraZeneca (NASDAQ:AZN)

• Stock rose 5% after posting better-than-expected Q4 earnings, as:
  • Blockbuster cancer drugs boosted sales
  • Weak China sales and executive issues had limited impact

Carlsberg (CSE:CARLb)

• Stock rose 6% despite its 2.8% increase in full-year operating profit falling short of market expectations.

Siemens Healthineers (ETR:SHLG)

• Stock rose nearly 6% after reaffirming its 2025 outlook, reporting:
  • Strong Q1 start
  • 11% rise in net income

Maersk (CSE:MAERSKb)

• Stock soared 9% after announcing:
  • $2 billion share buyback
  • Hefty dividend payout

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Oil Prices Rebound After Stockpile-Inspired Drop

• U.S. Crude (WTI): $71.62 (+0.8%)
• Brent Crude: $75.15 (+0.7%)

Market Drivers

• Oil prices had plunged over 2% on Wednesday after the U.S. Energy Information Administration (EIA) reported an 8.7 million-barrel build in crude inventories, exceeding industry estimates.
• Prices have fallen about 10% since Jan. 15, days before Donald Trump took office, as markets assess the impact of U.S.-China trade tariffs, including duties on energy products.
• Saudi Arabia’s price hikes for Asian buyers helped stabilize the market.

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Market Outlook

• BoE’s rate decision will be key for UK and European markets.
• Earnings season remains in focus, with major financial, pharmaceutical, and industrial companies shaping investor sentiment.
• Oil markets will closely watch demand trends and trade war developments for further price direction.