Investing.com — European equities were subdued on Wednesday, as investors mulled over fresh corporate earnings and eyed the upcoming release of new economic data out of Germany.
Asian shares provided a strong handover to Europe, with stocks in the region jumping to their highest levels in seven months as many markets reopened after Lunar New Year holidays. Volumes remained muted, however, with key markets in China and Taiwan still closed.
World stock markets have performed broadly stronger so far this year compared to a rollercoaster 2022. Many traders expect that the U.S. Federal Reserve will slow its recent monetary policy tightening cycle following signs of potentially peaking inflation, while optimism has also been boosted by the sudden scrapping of COVID-19 restrictions in China.
In a note to clients, analysts at ING said more color will be provided about the outlook for Europe’s largest economy, Germany, with the release of the Ifo business index for January. Economists expect the reading to improve slightly compared to December.
“[T]he most notable G-7 releases have been a bunch of PMI figures out of Europe, which painted a slightly less bleak picture of the economy than for some time, with the composite PMI just clawing its way back above the 50 threshold boom/bust level,” the ING analysts said, referring to several business activity surveys published on Tuesday.
In corporate news, Dutch semiconductor supplier ASML Holding NV (AS:ASML) predicted that first-quarter gross margin will come in between 49% and 50%, missing estimates. Amsterdam-listed shares in the company slipped in early trading.
Budget carrier EasyJet PLC (LON:EZJ) saw shares soar to their highest point since June after it posted first-quarter revenue well above consensus estimates and said it expects to return to an annual profit following three years of pandemic-fueled losses.
Renault SA (EPA:RENA) shares also rallied after analysts at AlphaValue/Baader upgraded their rating of the French carmaker to buy from hold, saying the company’s short-term performance will benefit from structural improvements.
The extent of China’s recovery in demand, as well as the possibility of oil group OPEC+ keeping production unchanged at its meeting next week, were key themes in energy markets. By 03:45 ET, the U.S. crude futures traded 0.19% lower at $79.98 per barrel and the Brent contract decreased by 0.06% to $86.08 a barrel.