This was CNBC’s live blog covering European markets.
European markets closed lower on Wednesday as investors assessed numerous earnings releases and a hotter-than-expected U.K. inflation print.
The regional Stoxx 600 index ended the session 0.9% lower, further pulling away from Tuesday’s all-time closing high, and marking the index’s biggest daily drop in 2025.
Dutch healthcare technology group Philips dropped 11% after missing sales growth expectations for the fourth quarter amid a double digit decline in China. Analysts at Citisaid the market would also focus on the company’s “underwhelming” guidance for 2025.
Earnings on Wednesday also included BAE Systems, shares of which slipped despite the British defense giant reporting a record order book and higher annual profit. Mining firm Glencore was meanwhile 7% lower after posting a 16% year-on-year decline in adjusted earnings in its preliminary annual results
Europe’s largest lender HSBC earlier on Wednesday reported an annual pre-tax profit of $32.31 billion, marginally missing analysts’ estimates, as the bank’s net interest income declined by $3.1 billion from a year earlier.
The U.K.’s inflation rate rose to 3% in January, above the 2.8% forecast in a Reuters poll, according to data released by the Office for National Statistics (ONS) on Wednesday. Core inflation, excluding energy, food, alcohol and tobacco prices, hit 3.7%, up from 3.2% in the previous month and the highest rate since April 2024.
Asia-Pacific stocks were mostly lower overnight, breaking ranks with Wall Street that saw the S&P 500 close at a record high on Tuesday as investors appeared to look past tariffs and inflation headwinds.
U.S. stock futures opened lower on Wednesday with the S&P 500 declining alongside the broad market index, Nasdaq Composite, and the Dow Jones Industrial Average.
Vopak sheds 7% after posting nearly 8% drop in revenues
Dutch tank storage group Vopak‘s shares closed 7.4% lower on Wednesday after it reported a year-on-year drop in its full-year earnings.
The firm posted a 7.7% drop in full-year revenue to 1.32 billion euros ($1.37), compared to 1.43 billion euros in 2023.
Gas terminals performance showed firm throughput levels, backed by growing energy demand and energy security considerations around the globe,” Vopak said in its press release. “Amidst weak chemical markets, the demand for storage infrastructure was stable.
— Sawdah Bhaimiya
U.S. stocks open lower
Stocks opened lower on Wednesday, with the S&P 500 pulling back from its most recent record high a day earlier.
The broad market index slipped 0.22%, alongside the Nasdaq Composite. The Dow Jones Industrial Average declined 173 points, or 0.39%.
— Brian Evans
Bank of England unlikely to be concerned by hot inflation print, economist says
Policymakers at the Bank of England won’t be overly concerned by the rise in U.K. inflation to an unexpectedly high of 3% in January, according to ING’s developed markets economist, James Smith.
“I think everybody anticipated this pick-up in services inflation,” Smith told CNBC’s “Squawk Box Europe” on Wednesday. Components that drove the headline rise, including higher air fares, private school fees and food prices, are not focuses for the U.K. central bank, he continued.
“Take out the noisy stuff… the news is getting better. That core, services view is coming down slowly.”
However, the trajectory of wages and the labor market — among the most important factors for the BOE — are the “major uncertainty right now,” Smith said.
Money market pricing currently points to a likely BOE interest rate hold in March following its January cut, and for another half-percentage point worth of cuts by the end of the year.
— Jenni Reid
UK house price growth accelerates
Average U.K. house prices rose 4.6% to £268,000 ($337,669) in the 12 months to December 2024, the Office for National Statistics said Wednesday, up from the 3.9% growth rate in November.
Average private rent meanwhile increase 8.7% in the 12 months to January, the ONS said, a slight cooling from 9% in December. Average rent was £1,375 in England, £780 in Wales and £995 in Scotland.
“With demand still outstripping supply both for purchasing and the rental markets, it’s not surprising to see prices continue to hold or increase over the last 12 months,” Justin Moy, managing director at EHF Mortgages, said in emailed comments.
“For rentals, the smaller landlords are selling and the corporate landlords are taking up market share at pace, whilst for first-time buyers the opportunity to own your home is still attractive, even with higher mortgage rates.”
— Jenni Reid
HSBC shares nudge higher despite Deutsche Bank downgrade
London-listed shares of HSBC were up 0.7% in mid-morning deals, reversing an earlier slight loss, after the bank announced a share buyback of up to $2 billion and an annual pre-tax profit increase of 6.5%.
The gains came despite analysts at Deutsche Bank downgrading the stock to “hold” from “buy,” writing that “after a substantial increase in share price, the value, in our view, is no longer there.”
“HSBC doesn’t have to do a lot to maintain a healthy mid-teens ROTE [return on tangible equity] after many years of restructuring. We expect any incremental restructuring will be relatively small and aimed at maintaining ROTE levels against a falling rate environment across a global cost base,” they said in a note Wednesday.
“If the scale of restructuring is contained, then we believe our capital return expectations could remain unchanged — one of the key attractions of the stock.”
HSBC shares have notched significant gains in recent years, adding 26.5% in 2024, and are up another 14% already in the year-to-date.
UBS analysts said Wednesday that the bank had delivered profit before tax 9% above consensus in the fourth-quarter 2024, but said investor focus would now be on whether it could deliver “long term growth at an attractive price.”
— Jenni Reid, Ganesh Rao
Europe stocks open mixed
European stock markets were mixed early Wednesday, with the regional Stoxx 600 index moving either side of the flatline.
Germany’s DAX managed a 0.28% gain, while France’s CAC 40 was 0.12% lower and the U.K.’s FTSE 100 dipped 0.26%.
— Jenni Reid
BAE Systems says order backlog at record high as revenue rises 14%
Britain’s largest defense firm BAE Systems said on Wednesday that its order backlog rose 11% to a record high at the end of 2024, as it reported a 14% increase in annual revenue for 2024.
Operating profit rose 4% to £2.69 billion ($3.39 billion) over the period.
“Based on the exceptional visibility of our record order backlog and sustainability of our value-compounding business model, we remain confident in the positive momentum of our business into the future,” CEO Charles Woodburn said in a statement.
BAE Systems and other European defense companies have posted share gains this week on expectations of higher government spending.
Matt Dorset, equity analyst at Quilter Cheviot, said in emailed comments that the results had exceeded consensus expectations across the board, including on earnings per share, organic sales and underlying earnings.
“We continue to see structural tailwinds supporting BAE, driven by increased global defense spending,” Dorset said.
“Not only will larger defence budgets drive demand, but Europe is also likely to focus on enhancing its own defence production capabilities rather than relying on US exports.”
“BAE Systems, as a pureplay UK defence company with substantial exposure to European demand, is well-positioned to capitalise on this.”
— Jenni Reid
UK inflation jumps to higher-than-expected 3% in January
Annual U.K. inflation rose to 3% in January, higher than analyst expectations, according to data released by the Office for National Statistics on Wednesday.
Economists polled by Reuters had expected a reading of 2.8%.
— Holly Ellyatt
Philips CEO says Chinese consumer recovery is ‘when not if’ story
Philips CEO Roy Jakobs said Wednesday that recovery in Chinese consumer demand was a “when not if” story, after the health-care technology giant reported a double-digit fall in China sales.
“We believe [Chinese demand] will come back, long term it’s attractive, but we’re just not sure when it’s going to happen and when it’s going to hit that inflection point,” Jakobs told CNBC’s “Squawk Box Europe.“
Jakobs said that the importance of health care to the country’s ageing population meant pent-up demand would start to build up, and that he foresees strength in North America sales to continue.
On the risks to the business from U.S. President Donald Trump’s tariff threats, Jakobs said Philips had already been reducing its exports from China to the U.S. and had included the impact in its current guidance.
He added that “uncertainty around tariffs” was why the company had provided a wide adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin outlook for 2025 of 30 to 80 basis points.
Philips reported a 1% increase in comparable sales growth for both the fourth-quarter and full-year 2024 on Wednesday. Its net loss widened to 698 million euros ($729.9 million) from 463 million euros on an annual basis, with fourth-quarter performance slipping year on year from a 38 million euro profit to a 333 million euros loss. That weaker annual loss was in part due to a nearly 1 billion euro provision after it settled in a long-running U.S. case over its Respironics devices.
Jakobs said 2024 had been a “pivotal” year for Philips in which it had reduced liability and improved its fundamentals, including margin expansion and strong cash generation.
— Jenni Reid
Philips sales slightly higher but miss expectations amid China weakness
Dutch health-care technology group Philips on Wednesday reported comparable sales growth of 1% for the fourth quarter and 1% for the full year 2024, as strength in North America was offset by a double-digit decline in China.
The quarterly figure was below market expectations, according to Reuters.
Sales fell in its Diagnosis and Treatment and Personal Health units, and rose 7% in its Connected Care business.
The company said its outlook was for 1%-3% comparable sales growth in 2025, with a mid- to high-single-digit decline in China.
— Jenni Reid
European stocks are outperforming their U.S. counterparts — but for how long?
European stock markets have been on a tear this year, brushing off tariff threats, political volatility and economic stagnation — and strategists see significant upside ahead, even if a long-awaited annual outperformance over their U.S. peers remains elusive.
In January, the pan-European Stoxx 600 index notched its best outperformance against the S&P 500 for that month in the past decade, rising by 6.3% versus 2.7%. That momentum has continued into February, with the Stoxx 600’s 3.3% monthly gain as of Feb. 18 coming in well above the S&P 500’s 1.25%.
Read more on the story here on CNBC Pro: European stocks are outperforming their U.S. counterparts — but for how long?
— Jenni Reid
European markets: Here are the opening calls
European markets are expected to open in mixed territory Wednesday.
The U.K.’s FTSE 100 index is expected to open 5 points lower at 8,763, Germany’s DAX up 9 points at 22,868, France’s CAC down 12 points at 8,209 and Italy’s FTSE MIB 58 points higher at 38,686, according to data from IG.
Earnings come from BAE Systems, Glencore, Rio Tinto, Koninklijke Philips and Carrefour.
Data releases Wednesday include the latest U.K. inflation data. Economists polled by Reuters expect the U.K.’s consumer price index to have risen to 2.8% in January, up from 2.5% the previous month.
— Holly Ellyatt
