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European equities climbed modestly on Thursday, supported by strong performances in the energy sector and a raft of corporate earnings, even as investors weighed the implications of U.S. sanctions on Russia and renewed U.S.–China trade tensions.
At 07:05 GMT, Germany’s DAX rose 0.1%, France’s CAC 40 gained 0.2%, and the U.K.’s FTSE 100 advanced 0.4%, led by oil majors and resource-linked stocks.
Energy Stocks Lifted by Trump’s Sanctions on Russia
Market sentiment in Europe’s energy space brightened after U.S. President Donald Trump imposed sanctions on Russia’s oil giants Lukoil and Rosneft, accusing them of financing the Kremlin’s war in Ukraine.
The move marks a clear shift in Trump’s previously cautious approach toward Moscow and is expected to tighten global oil supply, driving crude prices higher.
As a result, Brent crude surged 3.1% to $64.54 per barrel, while WTI crude rose 3.3% to $60.43, supporting gains for major European oil companies.
Energy heavyweights such as Shell, BP, and TotalEnergies rallied sharply, helping offset broader regional uncertainty.
U.S.–China Tensions Cap Broader Gains
Despite the rally in energy, overall upside was capped by renewed U.S.–China trade frictions.
Reports surfaced that Washington is weighing restrictions on exports of software-driven products to China — including jet engines, laptops, and high-tech machinery — in retaliation for Beijing’s latest rare earth export controls.
The development added fresh uncertainty ahead of the anticipated Trump–Xi summit in South Korea next week, with the U.S. president acknowledging that the meeting “may not happen,” despite his earlier optimism.
Corporate Earnings Drive Stock-Specific Moves
The session was dominated by a flood of corporate earnings reports across major European markets:
- Unilever (LON:ULVR) rose after reporting better-than-expected Q3 sales, powered by strong beauty and personal care demand in North America and emerging markets.
- Lloyds Banking Group (LON:LLOY) slumped as its third-quarter profit fell 36%, hurt by an £800 million charge related to the motor-finance mis-selling scandal.
- Nokia (HE:NOKIA) beat forecasts with robust growth in optical and cloud network demand, supported by AI-driven data center expansion after its Infinera acquisition.
- Thales (EPA:TCFP) rose on a 9% increase in nine-month sales, driven by momentum in aerospace and defense, reaffirming its full-year guidance.
- Sodexo (EPA:EXHO) slipped after forecasting slower revenue growth in 2026, citing softness in its U.S. operations.
- STMicroelectronics (EPA:STMPA) reported a 32% drop in Q3 profit amid weaker demand in automotive and industrial segments, though it expects a mild recovery in Q4.
- Dassault Systèmes (EPA:DAST) delivered higher earnings and margins but trimmed its 2025 revenue outlook due to slowing software sales.
Wall Street Outlook: Tesla Results in Focus
Investor attention is also turning to Wall Street, where Tesla (NASDAQ:TSLA) became the first of the “Magnificent Seven” tech giants to report quarterly results.
Tesla’s profit missed expectations, pressured by tariff-related expenses, higher R&D costs, and reduced income from regulatory credits.
However, revenue beat estimates, driven by record EV deliveries as buyers rushed to benefit from expiring U.S. tax credits.
The company’s results are seen as a bellwether for upcoming earnings from Microsoft, Meta, Amazon, Apple, Nvidia, and Alphabet, which together could shape the next leg of the global equity rally.
Outlook
While European markets are holding firm, the mix of geopolitical tension, energy market volatility, and heavy earnings flow suggests that sentiment may remain fragile in the near term.
Investors are also eyeing upcoming U.S. inflation data and Federal Reserve policy guidance, both of which could influence risk appetite heading into next week.
