European markets advance as investors watch earnings, monetary policy

Soegeefx AppsEU MarketEuropean markets advance as investors watch earnings, monetary policy

Elliot Smith

European markets nudged higher on Tuesday as global investors assessed the outlook for monetary policy from the U.S. Federal Reserve and digested a swathe of corporate earnings.

European markets

.FTSE FTSE 100 7001.07 -12.92 -0.18
.GDAXI DAX 12960.34 28.89 0.22
.FCHI CAC 40 Index 6158.22 26.86 0.44
.FTMIB FTSE MIB 22029.27 46.32 0.21
.IBEX IBEX 35 Idx 7730 49.5 0.64

The pan-European Stoxx 600 climbed 0.4% in early trade, with tech stocks adding 1.7% to lead gains as most sectors and major bourses entered positive territory. Chemicals bucked the trend to slide 0.5%.

Among the major companies reporting quarterly earnings on Tuesday were HSBC, UBS, Novartis, Randstad, Air Liquide, SAP and Covestro.

Shares in Europe closed higher on Monday after the announcement that Rishi Sunak would replace Liz Truss as U.K. prime minister. Sunak will be formally confirmed as the country’s new leader on Tuesday amid a period of economic turbulence.

U.S. stock futures were flat in early premarket trade on Tuesday ahead of a big few days of earnings from the world’s largest tech companies.

Shares in Asia-Pacific nudged mostly higher overnight after a second consecutive positive trading session on Wall Street, though Hong Kong and mainland Chinese markets were volatile following the conclusion of the China’s party congress and the release of a slew of delayed economic data.

Stocks on the move: Viaplay down 24%, UMG up 8%

Earnings were a key driver of share price movement in Europe on Tuesday.

At the bottom of the Stoxx 600, shares of Sweden’s Viaplay Group plunged 24% in early trade after the media company reported a third-quarter operating loss of 100 million Swedish ($8.96 million).

HSBC shares slid more than 5% after the U.K.-headquartered bank reported a 42% slide in pretax profit.

At the top of the European blue chip index, Universal Music Group shares gained 8% during early deals in the Netherlands.

– Elliot Smith

HSBC reports 42% profit slide on rising credit loss provisions

HSBC on Tuesday reported a 42% fall in third-quarter pretax profits following losses on the sale of its French business and a rise in bad loan provisions.

The British-headquartered lender saw net income surge on the back of rising interest rates and posted a pretax profit of $3.15 billion for the three months to the end of September, down from $5.4 billion for the same period in 2021 but well above average analyst estimates of $2.45 billion.

The sale of the bank’s French unit, part of a wider effort to boost profits, resulted in a $2.4 billion hit.

– Elliot Smith

Swiss bank UBS posts 24% profit slide but beats analyst expectations

UBS reports its latest earnings

UBS on Tuesday reported a net income of $1.7 billion for the third quarter of this year, slightly above analyst expectations, with the Swiss bank citing a challenging environment.

Analysts had expected a net profit of $1.64 billion, according to Refinitiv data. UBS reported a net income of $2.3 billion a year ago.

– Silvia Amaro

Here are the opening calls

Britain’s FTSE 100 is expected to inch around 2 points higher to 7,016, Germany’s DAX is seen flat at 12,931 and France’s CAC 40 is set to add around 22 points to 6,153.

— Elliot Smith

CNBC Pro: Sell stocks in a bear market rally, says J.P. Morgan Private Bank strategist

A J.P. Morgan Private Bank strategist has said investors should use bear market rallies, like the current one, to “de-risk” their portfolio and sell stocks ahead of a big fall in the broader market.

Last week, the S&P 500 rose by more than 3.5% despite declining by 22% this year.

The SPY ETF, which tracks the U.S. large-cap index, has risen by more than 5% in a week four times this year and twice more than 7%, according to data from Koyfin.

— Ganesh Rao

CNBC Pro: Chinese stocks are ‘inexpensive’ after big drops, fund manager says

China has become an “attractive market” for investors after stock valuations have fallen by more than 50% since 2021, according to one fund manager.

Foord Asset Management’s Brian Arcese expects valuations to bounce back over the next 12 months as he believes the “regulatory overhang” facing Chinese stocks is “abating.”

— Ganesh Rao

Source : CNBC

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