Stocks in Europe were higher before a eurozone rate decision on Thursday, while US equities are called to open in the green despite tech earnings that received mixed reviews.
The FTSE 100 index added 37.09 points, 0.4%, at 8,594.90. The FTSE 250 was up 174.66 points, 0.9%, at 20,734.36, and the AIM All-Share added 5.22 points, 0.7%, at 717.41.
The Cboe UK 100 was up 0.5% at 861.67, the Cboe UK 250 rose 0.9% to 18,145.52, and the Cboe Small Companies was down 0.2% at 15,992.69.
In Frankfurt, the DAX 40 rose 0.4% in early afternoon trade, while the CAC 40 added 0.5%.
The pound traded at $1.2434 early Wednesday afternoon, flat from $1.2435 late Tuesday. The euro fell to $1.0397 from $1.0419. Against the yen, the dollar slipped to JP¥154.52 from JP¥155.08.
‘The ECB meeting is scheduled for this Thursday at 1315 GMT. The market is certain that the ECB will cut interest rates at this meeting and is 100% priced for a cut. We do not expect the ECB to disappoint market expectations. The impact from the rate cut is not expected to be particularly market moving, instead, the focus will be on ECB President Christine Lagarde’s press conference at 1345 GMT and the ECB statement that will accompany the decision,’ XTB analyst Kathleen Brooks commented.
‘President Trump’s tariffs are the key threat for the eurozone economy right now. Although Trump has spoken out about universal tariffs and has signalled that he is not happy with the Eurozone’s trade surplus with the US, he has not specifically mentioned tariffs for the currency bloc, unlike Mexico and Canada.’
Ahead of the data, numbers showed the eurozone’s economy tread water in the final quarter of 2024.
Gross domestic product in the eurozone did not move in the final quarter of 2024 compared to the third quarter, when it had grown 0.4%.
The FXStreet-cited consensus had pencilled in an increase of 0.1% for the fourth quarter of 2024.
Over in New York, the Dow Jones Industrial Average and S&P 500 are called up 0.4%, and the Nasdaq Composite 0.6% higher.
AJ Bell analyst Russ Mould commented: ‘The Federal Reserve’s decision to leave US interest rates unchanged was widely expected and that has brought some calm to the markets.’
Shares in electric carmaker Tesla were 2.8% in pre-market dealings, Facebook Meta Platforms was up 2.2% but Microsoft was 3.8% lower. The trio reported earnings after the closing bell in New York on Wednesday.
Analysts at Deutsche Bank summarised: ‘Firstly Microsoft’s shares fell by nearly 5% in post-market trading despite a headline beat, as cloud revenue growth missed estimates amid capacity constraints in the company’s data centre business. Meta delivered a solid earnings beat, but its Q1 sales guidance of $39.5 billion to $41.8 billion came towards the lower end of expectations, $41.7 billion midpoint. Still, Meta shares gained.
‘Tesla initially slipped after missing Q4 revenue estimates, but was more than +4% higher by the end of after-hours trading after reassuring investors that it expects to return to positive sales growth this year with Musk claiming ’epic’ growth ahead.’
In London, Airtel Africa and St James’s Place rose 10% and 8.7%, the best FTSE 100 performers.
Airtel, a telecommunications and mobile money services provider in 14 countries in Africa, said pretax profit ballooned to $316 million in the third quarter ending December from $43 million a year prior.
Wealth management firm St James’s Place said its funds under management grew more than 10% during 2024, after a ‘strong’ final quarter.
Also on the up, Shell climbed 1.2%. The oil firm maintained the $3.5 billion pace of share buybacks despite weaker-than-expected fourth quarter earnings, which reflected write-offs in its oil exploration business and lower oil prices.
easyJet rose 4.0%, while British Airways owner IAG climbed 1.1%. UK Chancellor Rachel Reeves confirmed plans for a third runway at Heathrow on Wednesday.
easyJet Chief Executive Kenton Jarvis said the airport expansion would ‘provide consumer and economic benefits’, adding that it would allow the airline to ‘operate from the airport at scale for the first time’.
Wizz Air was one carrier that tumbled, however. Shares slumped 7.8%. It expects annual net income between €250 million and €300 million, the guidance chopped from the €350 million and €450 million range. The latest forecast excludes any unrealised foreign exchange losses.
Reported net profit in the range of €125 million to €175 million is expected at current exchange rates.
Wizz reported a €160 million ‘negative FX charge recognised’ in its third-quarter to December 31.
A barrel of Brent declined to $75.61 in the early afternoon, from $77.21 at the time of the London equities close on Wednesday. An ounce of gold rose to $2,777.54 an ounce from $2,752.18.
After the ECB decision, there is a US gross domestic product reading at 1330 GMT.
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