European markets saw a modest lift as investors turned their attention to earnings reports from key players like UBS, BNP Paribas, and Ferrari. The market remained cautious amid concerns over potential US tariffs, but notable stock movements captured investor interest.
The pan-European Stoxx 600 index closed the session with a 0.22% gain at 536.04 points, recovering from early fluctuations. Automobiles led sectoral growth, with Ferrari surging 8% following its announcement that revenue and core earnings would rise by at least 5% this year, reflecting strong performance expectations. Conversely, the financial services sector struggled, declining 1% after UBS Group shares fell 7%. Investors reacted negatively to CEO Sergio Ermotti’s warning that higher capital requirements in Switzerland could impact shareholder returns, despite the bank posting an upbeat fourth-quarter profit.
One of the session’s most dramatic declines came from gaming group Embracer, which plummeted 41.5% ahead of its planned spin-off by tabletop game publisher Asmodee. On the other hand, German chipmaker Infineon delivered a standout performance, rising 10.4%—the highest gain on the index—after exceeding first-quarter revenue expectations and slightly raising its full-year outlook. Analysts noted that inventory reductions had impacted the semiconductor industry, but Infineon’s position remained strong despite potential trade tensions.
The broader market continued to react to US trade policies. European stocks suffered their steepest decline of the year on Monday following former US President Donald Trump’s announcement of impending tariffs on top trade partners, including the EU. However, a 30-day delay on 25% tariffs for Mexico and Canada provided temporary relief. Meanwhile, China introduced retaliatory tariffs on certain US imports, effective February 10, in response to Washington’s latest levies. EU trade chief Maros Sefcovic emphasised the importance of swift engagement with US officials to mitigate potential economic fallout.
Among individual stocks, Diageo fell 1.6% after the global spirits leader withdrew its medium-term organic sales growth target, taking preemptive steps to counteract the impact of US tariffs on its tequila and Canadian whisky segments. In the banking sector, BNP Paribas climbed 4.2% after reporting stronger-than-expected fourth-quarter net income, driving a broader 1.6% sector gain. However, Vodafone saw a 7% decline as the telecom giant continued to struggle in the German market, reporting further deterioration in its third-quarter performance.
The French CAC 40 index closed 0.6% higher, with investors closely monitoring developments around the 2025 budget bill. Despite ongoing global uncertainties, select earnings reports and strategic positioning within industries helped lift certain European stocks, underscoring a mixed but resilient market outlook.
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