European Stocks Hit Record Highs; Siemens Soars While FTSE 100 Falls

European stock markets continued their upward trajectory on Thursday, buoyed by strong corporate earnings and economic data. The Stoxx 600 index saw a modest increase of 0.29%, extending the positive momentum from earlier in the week when it achieved three consecutive record highs. Siemens, the German technology conglomerate, was a standout performer, surging by 5.9% following a stronger-than-expected first-quarter profit despite challenges in its factory automation division.

However, the UK’s FTSE 100 bucked the trend, falling 0.8%. The decline was driven by weakness in banking and oil sectors, with Barclays’ stock dropping by 5.2%, despite the bank posting a slight profit increase and announcing a significant share buyback. Additionally, data from the UK’s Office for National Statistics revealed that the UK economy grew by 0.1% in the fourth quarter of 2024, surpassing expectations that had forecasted a contraction of 0.1%. Despite the growth, experts noted that the UK’s GDP per capita actually declined slightly throughout the year.

Investors also turned their attention to global economic developments, particularly the ongoing war in Ukraine. US President Donald Trump reported discussions with both Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy, with both leaders expressing a desire for peace. This has spurred optimism among market participants that a resolution to the war could be on the horizon, potentially boosting market sentiment.

Corporate results were mixed, with Nestle posting weaker-than-expected sales growth in 2024, which aligned with forecasts, but the company remained optimistic for a rebound in 2025. Meanwhile, Siemens’ CEO Roland Busch voiced concerns about the regulatory environment in Europe, urging for more innovation before implementing further regulation, particularly in light of the company’s strong financial performance despite challenges in certain sectors.

On the economic front, inflation data from the US sparked concerns about a prolonged period of high interest rates. The consumer price index showed a rise of 0.5% in January, pushing the annual inflation rate to 3%, higher than anticipated. This has led to expectations that the Federal Reserve may delay interest rate cuts longer than previously thought. Global markets, including Europe and Asia-Pacific, remained generally positive despite these inflation concerns, with Australian stocks hitting record highs.

SOURCE: CNBC