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European equities traded in mixed fashion on Tuesday, as investors weighed a heavy slate of corporate earnings against a backdrop of improving global risk appetite.
At 03:05 ET (08:05 GMT), Germany’s DAX slipped 0.2% and the U.K.’s FTSE 100 also edged 0.2% lower, while France’s CAC 40 bucked the trend, rising 0.3%.
Global sentiment rebounds
Risk appetite has improved across global equity markets, supported by a rebound in technology and artificial intelligence-related stocks following last week’s sharp sell-off.
On Wall Street, major indices posted a second consecutive session of gains, with the blue-chip Dow Jones Industrial Average closing at a fresh all-time high. In Asia, Japan’s Nikkei 225 ended at a record level after Prime Minister Sanae Takaichi secured a landslide victory in the Lower House election, boosting political stability hopes.
European markets have also started the year on a positive footing. The DAX and CAC 40 are both up more than 2% year-to-date, while the FTSE 100 has gained over 4%, largely underpinned by generally resilient corporate earnings.
Earnings remain in focus
Corporate results continued to dominate trading on Tuesday as the quarterly reporting season gathered pace.
Dutch health technology group Philips reported a stronger-than-expected fourth quarter, posting €5.10 billion in sales as broad-based demand offset the impact of higher tariffs.
Luxury group Kering reported a slightly smaller-than-expected decline in fourth-quarter sales, as new CEO Luca de Meo, in his first quarter at the helm, sought to stabilise the business amid a challenging environment for high-end consumer spending.
AstraZeneca forecast profit and sales growth for 2026, banking on sustained demand for its cancer treatments and newer drugs as it accelerates expansion efforts in the U.S. and China.
Barclays said its annual profit rose 12% and unveiled updated performance targets through 2028, as the bank looks to improve returns by sharpening its focus on its domestic market and leveraging technology, including artificial intelligence, to cut costs.
On the downside, BP announced it would suspend share buybacks and divert excess cash toward strengthening its balance sheet after reporting a fourth-quarter loss of $3.4 billion, compared with a $1.2 billion profit in the previous quarter.
UK political uncertainty adds caution
The European economic calendar was relatively light, though data showed France’s unemployment rate edged up to 7.9% in the fourth quarter from 7.7% previously.
Political developments in the U.K. also remained in focus. Prime Minister Keir Starmer is facing mounting pressure following controversy surrounding the appointment of Peter Mandelson as the U.K.’s ambassador to the United States. Calls for Starmer’s resignation were renewed on Monday, though he has rejected stepping down.
According to Ruth Gregory, Deputy Chief UK Economist at Capital Markets, any leadership change could initially push gilt yields higher and weaken the pound. Over the longer term, she said, markets could price in looser fiscal policy, leading to persistently higher yields and a softer currency.
Middle East tensions keep oil risks elevated
Oil prices edged modestly lower on Tuesday, though geopolitical risks remained elevated amid strained relations between the U.S. and Iran.
Brent crude futures slipped 0.3% to $68.86 a barrel, while U.S. West Texas Intermediate crude also fell 0.3% to $64.18.
Prices had climbed more than 1% on Monday after U.S. authorities warned American-flagged vessels to steer clear of Iranian territorial waters when transiting the Strait of Hormuz and the Gulf of Oman. Roughly a fifth of global oil consumption passes through the Strait of Hormuz, making any escalation in the region a significant threat to global supply.
The warning came despite recent progress in U.S.-Iran talks and commitments from both sides to continue negotiations over Tehran’s nuclear programme, keeping markets alert to sudden shifts in geopolitical risk.
