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European stocks rise, helped by positive global sentiment; NatWest gains

Published 2024-04-26, 03:58 a/m
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Investing.com - European stock markets rose Friday, regaining momentum as investors digested a slew of significant corporate earnings ahead of the release of key U.S. inflation data.

At 03:35 ET (07:35 GMT), the DAX index in Germany traded 0.5% higher, the CAC 40 in France traded 0.3% higher and the FTSE 100 in the U.K. climbed 0.6%.

European earnings season continues

European stock markets have received a healthy handover from Asia, with most markets buoyed by gains in the technology sector as investors cheered strong earnings from Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) after the U.S. close.

Back in Europe, Natwest (NYSE:NWG) stock rose 3.3% after the U.K. lender reported first-quarter profit falling by a hefty 27%, hit by competition for savings, lending and mortgage products which has squeezed margins across the sector. However, this drop was less than had been expected.

Britain's biggest casualty of the 2008 crisis, NatWest is this year looking to end state ownership, seeking to sell down the remainder of the government’s sub-29% stake in the bank.

TotalEnergies (EPA:TTEF) stock rose 0.4% after the energy giant reported a smaller-than-expected drop in first-quarter profit as a resilient oil market partly offset lower gas prices.

On the flip side, Saab (ST:SAABb) stock fell 3% despite the Swedish defense equipment maker, the manufacturer of the Gripen fighter jet, reported a 28% rise in operating profit for the first quarter and raised its organic sales growth outlook for the full year.

Fed’s favorite inflation gauge in spotlight

In economic news, French consumer confidence slipped slightly in April from March, while the Spanish unemployment rate edged higher in the first quarter.

However, most eyes will be on the release of the U.S. PCE price index later in the session, as this is widely seen as the Federal Reserve’s preferred gauge of inflation.

Data released on Thursday showed that growth in the U.S. economy cooled more than expected in the first quarter, but near-term rate cuts by the Fed are now deemed unlikely. 

The CME Fedwatch tool now shows traders pricing in rate cuts only by September, or the fourth quarter.

Crude set to end losing streak

Oil prices rose Friday, and were on track to snap a two-week losing streak amid bets on tighter supplies and persistent geopolitical unrest in the Middle East.

By 03:35 ET, the U.S. crude futures traded 0.6% higher at $84.04 a barrel, while the Brent contract climbed 0.5% to $89.46 a barrel.

For the week, Brent has gained 2.5% so far, while WTI is up over 1%.

Prices were boosted this week after overall U.S. inventories shrank more than expected in the past week, indicating some tightness in global oil markets.

Concerns over disruptions to Middle East supplies also remained in play as Israel stepped up its strikes against the militant group Hamas in Gaza, ensuring tensions remained elevated in the oil-rich region even with a war with Iran not materializing.

Comments from Janet Yellen also helped, as the U.S. Treasury Secretary  said Thursday’s disappointing first-quarter U.S. GDP figure could be revised higher, as U.S. economic growth was likely stronger than suggested by weaker-than-expected quarterly data.

Additionally, gold futures rose 0.6% to $2,356.00/oz, while EUR/USD traded just higher at 1.0730.

 

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