European stocks rose on Thursday, as investors focused on a slew of earnings reports as well as UK growth data.
At 11:10 AM Saudi time, the DAX index in Germany rose by 1%, the CAC 40 index in France rose by 1.4%, and the FTSE 100 index in the United Kingdom rose by 0.4%.
Focus on earnings reports
A host of European earnings reports are taking center stage for investors, as many of the region’s biggest companies have announced their results for the final quarter of 2025.
The financial health outlook for European companies has improved, based on LSEG data, but companies in the region are expected to report a decline in fourth-quarter profits in what could be their worst performance in the past seven quarters.
Analysts at Lombard Odier said in a note: “Europe lacks the AI-driven growth engines that are propelling the US, but investors are focused on a cyclical recovery in earnings. We expect earnings growth to rebound from -3.5% in 2025 to 9% in 2026, slightly below market expectations.”
Around 25% of companies have reported their results, with mixed earnings growth—a combination of estimated and reported growth to date—close to 5%. Companies are grappling with the effects of a strong euro and uneven demand.
Mercedes-Benz is experiencing problems in China.
Mercedes-Benz (ETR:MBGn) announced a 57% drop in 2025 profits, with revenues down 9%, as the luxury carmaker said profit margins in its automotive division could fall even further this year, indicating tough months ahead as the luxury automaker faces high costs, a difficult Chinese market, and global tariffs.
French luxury goods company Hermes (EPA:HRMS) posted another quarter of strong growth, with fourth-quarter revenue rising 9.8% on a currency-adjusted basis, exceeding analysts' expectations of 8.4% growth.
Performance in the Americas stood out, led by the US market, with an increase of 12.1%, comfortably exceeding expectations of around 9%.
Unilever's (LON:ULVR) fourth-quarter core sales growth exceeded market expectations, driven by strong demand for brands such as Dove and Vaseline, although it warned that slowing markets could hurt growth this year.
British American Tobacco (LON:BATS) announced a 2.3% increase in annual profits, as its Velo nicotine pouches gained market share and sales of newer e-cigarettes and heated tobacco products grew.
Thyssenkrupp (ETR:TKAG) announced better-than-expected results for the first quarter, with adjusted operating profit of €211 million exceeding consensus estimates, mainly due to strong performance in its European steel division.
Anheuser-Busch InBev (EBR:ABI), the world’s largest brewer, reported a 7.5% growth in fourth-quarter core earnings, exceeding expectations, with all three Americas regions beating forecasts for both volume and revenue growth despite a weak consumer environment.
German engineering giant Siemens (ETR:SIEGn) raised its full-year profit forecast after reporting higher first-quarter orders, revenue and operating profit, reflecting broad-based growth across its industrial business.
In addition, US asset management firm Nuveen agreed to buy British firm Schroders (LON:SDR) for just under £10 billion ($13.5 billion), creating a group with combined assets under management of nearly $2.5 trillion.
The British economy experienced minimal growth in December.
The British economy grew modestly in the final month of 2025, keeping the pressure on the Bank of England to continue easing monetary policy as the new year progresses.
Data released earlier on Thursday by the Office for National Statistics showed that Britain's gross domestic product grew by just 0.1% in December, a slowdown from the 0.2% growth recorded in the previous month.
On a quarterly basis, the economy grew by only 0.1% during the last three months of 2025, unchanged from the growth recorded during the period from July to September.
The Bank of England kept its benchmark interest rate unchanged at its first meeting of 2026 earlier this month, after cutting it six times since August 2024.
The U.S. jobs report released Wednesday showed nonfarm payrolls increased by 130,000 in January, compared with estimates of a 70,000 increase, while the unemployment rate fell slightly to 4.3%, compared with expectations of 4.4%.
This report reinforced expectations that the Federal Reserve will likely keep interest rates steady at least until the second half of the year.
Crude oil prices rise as tensions escalate in the Middle East.
Oil prices rose on Thursday as tensions continued in relations between the United States and Iran, raising concerns about supply disruptions from this crude oil-producing region.
Brent crude futures rose 0.4% to $69.69 a barrel, and U.S. West Texas Intermediate crude futures rose 0.5% to $64.97 a barrel.
Benchmark indexes rose by about 1% on Wednesday, as traders were seen pricing in a larger risk premium following reports that Washington was considering sending a second aircraft carrier to the region.
While Iran and the United States hailed some progress in talks held over the weekend, there does not appear to be a definitive agreement on Tehran's nuclear activities, keeping markets on edge.
