European Markets Trade Higher Amid Geopolitical Tensions

European markets saw modest gains on Tuesday, as investors closely monitored ongoing geopolitical developments. As of 03:08 ET (08:08 GMT), Germany’s DAX rose by 0.1%, the FTSE 100 in the U.K. increased by 0.2%, and France’s CAC 40 edged up by 0.1%.

U.S.-Russia Talks Sideline European Involvement

Geopolitical tensions remained a key focus as U.S. officials prepared to engage in talks with Russia aimed at ending the ongoing conflict in Ukraine. These discussions have notably excluded Kyiv and European leaders, drawing concern from the European Union.

In response, European leaders convened an emergency summit in Paris on Monday. While the summit resulted in an agreement to boost defense spending, no consensus was reached regarding the deployment of peacekeeping forces after the conflict ends.

U.K. Unemployment Rate Remains Stable at 4.4%

The U.K.’s jobless rate held steady at 4.4% for the three months ending in December, according to the Office for National Statistics. This figure remained unchanged from the previous quarter, which saw the highest unemployment rate since May 2024. Year-on-year, the rate increased by 0.5 percentage points.

The increase in unemployment comes amid concerns over a hike in employer National Insurance contributions introduced in October. A November survey by the Confederation of British Industry revealed that nearly half of businesses planned to reduce their workforce to offset the rising costs.

Corporate Earnings: Capgemini and IHG Report Results

• Capgemini (EPA:CAPP) reported a 1.9% decline in revenue for 2024, totaling €22.1 billion, primarily due to challenges in the manufacturing sector. Despite the dip in revenue, the company’s operating margin remained stable at 13.3%, supported by growth in Cloud, Data, and AI services. Notably, Generative AI contributed to 5% of the company’s Q4 bookings, reflecting increasing demand.
• InterContinental Hotels Group (IHG) (LON:IHG) reported a 10% increase in operating profit to $1.12 billion (£890 million) for 2024. This was driven by a rise in revenue per available room, which grew by 3% over the year and accelerated to 4.6% in Q4. The company also announced a 10% dividend increase and a $900 million (£719.4 million) share buyback program. Additionally, IHG acquired the European city-center chain Ruby, marking its 20th brand acquisition.

Crude Oil Prices Rise Amid Russian Pipeline Drone Attack

Crude oil prices rose on Tuesday, building on the previous day’s gains following a drone attack on an oil pipeline pumping station in Russia, which caused a reduction in oil flows from Kazakhstan. Despite the rise in prices, gains were limited by expectations that supply levels may increase in the near future.

By 03:08 ET, U.S. crude futures (WTI) were up 1% to $71.44 per barrel, while the Brent oil contract rose 0.3% to $75.41 per barrel.