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European equity markets ticked higher on Monday, supported by a broadly positive earnings season, although trading volumes remained subdued due to public holidays in Asia and the United States.
By 03:02 ET (08:02 GMT), Germany’s DAX rose 0.4%, France’s CAC 40 gained 0.2%, and the U.K.’s FTSE 100 advanced 0.2%, reflecting cautious optimism across the region.
Earnings momentum underpins sentiment
Market activity was muted at the start of the week, with the Lunar New Year holiday observed across much of Asia and George Washington’s Birthday marking a U.S. market holiday. Despite this, investor sentiment in Europe remained constructive as corporate earnings continue to surprise to the upside against a slowly improving economic backdrop.
According to data from LSEG, companies representing 57% of Europe’s total market capitalisation have reported fourth-quarter results so far, delivering average earnings growth of 3.9%. This compares favorably with earlier expectations for a full-season contraction of 1.1%. Around 60% of reporting firms have beaten analyst estimates, above the long-term average of 54%.
While Monday’s earnings calendar is relatively light, attention is building ahead of results from Europe’s largest mining groups later this week, including Rio Tinto, Glencore, Anglo American and Antofagasta. The reports come as prices for several industrial metals hover near multi-year highs.
Volkswagen also drew focus after Manager Magazin reported that the German automaker plans to cut costs by 20% across all brands by the end of 2028, underscoring ongoing restructuring efforts in the auto sector.
In the United States, investors are looking ahead to Walmart’s quarterly results on Thursday, which are expected to offer important insights into the health of U.S. consumer spending.
Key economic data ahead
On the macro front, the main European data release due Monday is euro zone industrial production for December, with economists forecasting a 1.5% month-on-month contraction.
In the U.K., housing data showed asking prices were largely flat in February, with the average price of newly listed homes slipping just £12 to £368,019 after a sharp 2.8% rise in January, according to Rightmove.
Earlier in the session, Japanese economic data disappointed, with GDP expanding just 0.2% annualised in the fourth quarter, well below expectations of 1.6%. The weak reading may strengthen calls for additional fiscal stimulus from Prime Minister Sanae Takaichi.
