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European stocks mixed after corporate results

written by Bella Palmer

The DAX index in Germany was 0.1% higher, the CAC 40 in France rose 0.1%, while the FTSE 100 in the U.K. shed 0.5%

European stock markets were mixed on Wednesday, with investors digesting a series of corporate results, including disappointment from HSBC.

At 08:05 GMT, the DAX index in Germany was 0.1% higher, the CAC 40 in France rose 0.1%, while the FTSE 100 in the U.K. shed 0.5%.

It is the corporate sector that is in the spotlight Wednesday, as the quarterly earnings season continued.

The day’s highlight is set to come from the U.S., with the main beneficiary of the AI boom, Nvidia, set to report another impressive quarter.

The chipmaker is widely expected to more than triple quarterly revenue to around $20 billion, but even this may not be enough to keep the stock rising given its huge rise over the past 18 months on the back of the seemingly unquenchable demand of all things AI.

Back in Europe, HSBC, the region’s biggest lender, reported a record annual profit of $30.3 billion for 2023, up 78% from a year earlier, and announced a new $2 billion share buyback.

Still, its stock dropped 5% as this result was marred by a $3 billion impairment on the bank's stake in China's Bank of Communications.

Rio Tinto stock dropped 1.2% after the miner’s underlying profit declined nearly 12% to $11.8 billion for 2023 as softer iron ore prices and demand weighed on its topline, and it cautioned that it still faced rising costs.

Glencore stock dropped 3.9% after the commodities trader and miner said that lower commodity prices had halved its earnings last year, prompting it to cut its dividend.

BAE Systems stock reported better-than-expected full-year profits and it said sales would likely grow further this year given increases in military spending by governments.

Now, the eurozone consumer confidence flash estimate for February is the only major report expected.

This is expected to show only a marginal improvement from January’s -16.1 level because regional sentiment stays weak as the eurozone narrowly avoided a recession at the end of 2023.

Investors are looking for clues of when the ECB will start its rate-cutting cycle in an effort to support the region’s modest growth.

They were given a boost on Tuesday with the news that negotiated wages growth slowed in Q4, given the importance the European Central Bank has placed on wage growth as its attempts to contain inflation.


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