European stocks rose Thursday, as investors focused on a large batch of earnings reports as well as U.K. growth data.
At 03:10 ET (08:10 GMT), the DAX index in Germany climbed 1%, the CAC 40 in France gained 1.4% and the FTSE 100 in the U.K. rose 0.4%.
Subscribe to InvestingPro for more stock market analysis Earnings reports in focus A slate of European earnings takes centre stage for investors, with a number of the region’s largest companies reporting their results for the final quarter of 2025.
The outlook for European corporate health has improved, based on LSEG data, but companies in the region are still expected to report a drop in fourth-quarter earnings in what could be their worst performance in the past seven quarters.
“Europe lacks the AI-driven growth engines powering the U.S., but investors are focusing on the cyclical earnings recovery,” said analysts at Lombard Odier, in a note. “We expect earnings growth to rise from -3.5 in 2025 to 9% in 2026, slightly below consensus.”
“Almost 25% of corporates have reported, with blended earnings growth – the combination of estimated and reported growth so far – close to 5%. Companies are struggling with the effects of a strong euro and uneven demand.”
Mercedes Benz suffers Chinese woes Mercedes Benz (ETR:MBGn) reported a 57% drop in 2025 earnings, with revenue dropping 9%, with the luxury carmaker stating that the profit margin at its autos division could fall further this year, indicating tough months ahead as the luxury carmaker grapples with high costs, a tough Chinese market and global tariffs.
French luxury goods company Hermes (EPA:HRMS) reported another quarter of solid growth, with fourth-quarter revenue rising 9.8% on a currency-adjusted basis, ahead of analyst expectations for 8.4% growth.
Performance in the Americas, led by the U.S. market, stood out with a 12.1% increase, comfortably exceeding forecasts of about 9%.
Unilever’s (LON:ULVR) fourth-quarter underlying sales growth beat market expectations, driven by a 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) reported a 2.3% rise in annual profit, as its Velo nicotine pouch gained market share and sales of its newer vapes and heated tobacco products grew.
Thyssenkrupp (ETR:TKAG) reported better-than-expected first quarter results, with adjusted EBIT of €211 million exceeding consensus estimates, primarily due to strong performance in its Steel Europe division.
Anheuser Busch Inbev (EBR:ABI), the world’s largest brewer, reported 7.5% growth in fourth-quarter underlying earnings, beating expectations, as all three Americas regions exceeded expectations for both volume and revenue growth despite a soft consumer environment.
German engineering giant Siemens (ETR:SIEGn) raised its full-year earnings outlook after reporting higher first-quarter orders, revenue and operating profit, reflecting broad-based growth across its industrial businesses.
Additionally, U.S. asset manager Nuveen has 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.
U.K. economy eked out growth in December
The U.K. 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 Thursday by the Office for National Statistics showed that U.K. gross domestic product grew by just 0.1% in December, a slowdown from the 0.2% growth seen the prior month.
On a quarterly basis, the economy grew by just 0.1% over the last three months of 2025, unchanged from the growth seen during the July-September period.
The Bank of England kept its benchmark interest unchanged at its first meeting of 2026 earlier this month, after cutting six times since August 2024.
The U.S. jobs report, released on Wednesday, showed nonfarm payrolls increased 130,000 in January, compared with an estimated 70,000 rise, while the unemployment rate ticked lower to 4.3%, versus expectations of 4.4%.
This release firmed expectations the Federal Reserve will likely hold rates steady at least till the second half of the year.
Crude rises with Middle East tensions elevated Oil prices edged higher Thursday as relations between the U.S. and Iran remained tense, raising concerns of supply disruptions from this key crude-producing region.
Brent futures gained 0.4% to $69.69 a barrel, and U.S. West Texas Intermediate crude futures rose 0.5% to $64.97 a barrel.
The benchmarks rose around 1% on Wednesday, as traders were seen pricing in a greater risk premium following reports that suggested Washington was considering sending a second aircraft carrier to the region.
