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European Stocks Higher; Strong BP Results Help Tone

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By Peter Nurse — European stock markets traded higher Tuesday, helped by robust results from energy giant BP (NYSE:BP) ahead of key U.S. inflation data later in the week.

By 3:45 AM ET (0845 GMT), the DAX in Germany traded 0.6% higher, the CAC 40 in France climbed 0.7% and the U.K.’s FTSE 100 rose 0.7%.

BP (LON:BP) reported a profit of $12.8 billion in 2021, the highest in eight years, as natural gas and oil prices soared and the global economy recovered from the pandemic slump.

The oil major also announced that it will repurchase another $1.5 billion of shares before it announces first-quarter results later this year, helping its stock, which has a heavy weighting in the benchmark FTSE 100 index, to climb 1.7% to a 52-week high.

Elsewhere, BNP Paribas (PA:BNPP) stock fell 3.5% after the French bank reported a drop in revenue at its important corporate and investment banking division of 1.5% in the final quarter of the year, despite otherwise very healthy results. BNP has been placing great importance on this division as it tries to compete with larger U.S. rivals in Europe.

Ocado (LON:OCDO) stock slumped over 9% after the online grocer reported a fall of more than 12% in annual core earnings, with investment in the business more than offsetting an increase in revenue.

Softbank (T:9984) announced earlier Tuesday its $66 billion deal to sell ARM to Nvidia (NASDAQ:NVDA), which had faced widespread resistance from regulators, had fallen through. It will now look to take the British-based chip designer public in the next year.

Away from the corporate sector, the major focus of investors at present is the speed that central banks withdraw the emergency support that they put in place two years ago. ECB President Christine Lagarde’s testimony in the European Parliament on Monday did little to change impressions, created at her press conference last week, that the bank is open to ending asset purchases and raising interest rates before the end of the year.

The Federal Reserve will receive another illustration of the inflationary pressures the U.S. economy is currently under on Thursday, with headline CPI seen rising 0.5% on the month and 7.3% on the year in January.

Back in Europe, Spain’s industrial output rose 1.3% year-on-year in December, far weaker than the 4.4% growth that had been expected.

Oil prices weakened Tuesday, continuing to drop after closing lower for the first time in seven sessions as the market focused on the resumption of nuclear talks between the West and Iran later in the session, which could lead to the removal of sanctions on Iranian oil sales.

While such an outcome could potentially increase global supply, talks have dragged on for more than a year since President Joe Biden took office and getting both sides to sign an agreement will prove difficult.

Investors will also look for U.S. crude oil supply data from the American Petroleum Institute, due later in the day.

By 3:45 AM ET, U.S. crude futures fell 0.6% to $90.75 a barrel, while the Brent contract fell 0.7% to $92.00.   

Additionally, gold futures fell 0.1% to $1,820.35/oz, while EUR/USD traded 0.3% lower at 1.1403.


European Stocks Higher; Strong BP Results Help Tone

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