Investing.com – European stock markets edged higher Friday, continuing the positive tone seen on Wall Street, with investors digesting more corporate earnings as well as the latest economic activity data.
At 03:05 ET (08:05 GMT), the in Germany climbed 0.2%, the in France gained 0.9% and the in the UK rose 0.2%.
European markets have received a positive lead-in from Wall Street, where the benchmark hit a record high after President Donald Trump, speaking online at the World Economic Forum in Davos, Switzerland, said he will call for lower interest rates from the Federal Reserve.
Eurozone PMIs due
Back in Europe, the focus will be on the release of the latest regional economic activity, with British and European PMI figures due later in the session.
Services seen outpacing manufacturing throughout the region, but the is expected to show that overall activity remains in contraction territory.
This should provide the European Central Bank with additional incentive to cut interest rates when it meets next week.
Economists widely expect the to slash rates by a quarter of a percentage point at its upcoming policy meeting, after having slashed borrowing costs four times to address weak growth and cooling inflation in the currency bloc.
By contrast, the raised interest rates by 25 basis points to around 0.5% earlier Friday, its third raise since it began scaling back its ultra-loose monetary policy in early-2024.
Restrained Q4 earnings expectations
The European quarterly earnings season is set to kick into top gear, and expectations are relatively restrained, with analysts estimating average fourth-quarter earnings growth of around 1.5% from the previous year.
Still, this would still mark the third consecutive quarter of expansion with forecasts showing both profit and sales growth for the first time since the first quarter of 2023.
Already out, Burberry (LON:) stock rose over 3% after the British luxury brand reported a 4% drop in quarterly comparable store sales for the third quarter to end-December, beating market expectations for a drop of 12% thanks to strong festive demand in the Americas.
Burberry said it was now more likely that it would avoid a full-year operating loss, having reported an operating loss in the first half.
Rolls-Royce (OTC:) stock gained 2% after the engineering giant said that it has won the biggest defence contract in its history, as the UK Ministry of Defence awarded the company a £9 billion deal to oversee the development and support of nuclear reactors for the Royal Navy’s submarine fleet.
Ericsson (BS:) stock slumped almost 9% after the Swedish telecom equipment maker missed analysts’ forecasts in the fourth quarter, as an expected rebound in sales to India didn’t materialize in the period.
Signify (AS:), the world’s biggest maker of lights, reported a bigger than expected drop in its full-year core profit and said CEO Eric Rondolat would step down after the annual general meeting in April. Its stock fell 2.6%.
Crude on course for hefty weekly losses
Oil prices steadied Friday, but remained on track for a weekly loss as President Trump called for lower crude prices and higher energy production in the US.
By 03:05 ET, the US crude futures (WTI) dropped 0.1% to $74.58 a barrel, while the contract fell 0.1% to $78.27 a barrel.
Both benchmarks were trading more than 3% lower for the week – their worst performance since November – after Trump signed an executive order calling for increased US oil production, while also scaling back certain climate-related restrictions on the energy sector.
Additionally, Trump, during his speech on Thursday at the World Economic Forum in Davos, Switzerland, called on Saudi Arabia and the Organization of Petroleum Exporting Countries to lower oil prices.
Uncertainty over his plans for trade tariffs against major economies, which could potentially disrupt global trade and weigh on oil demand, has also weighed.
