European stock markets rise; HSBC leads the earnings season

Investing.com - European stocks edged higher on Wednesday, boosted by a rebound in global confidence as investors assess a slew of important quarterly corporate earnings reports.

As of 16:02 Beijing time, Germany’s DAX index rose 0.1%, France’s CAC 40 increased 0.2%, and the UK’s FTSE 100 gained 0.5%.

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Risk Appetite Rises

Global risk appetite is increasing, boosting European market sentiment, as uncertainty surrounding U.S. President Donald Trump’s new global trade tariffs diminishes.

On Tuesday, major Wall Street indices closed higher, with Asian markets in Japan, South Korea, and Australia hitting record highs overnight.

In his overnight State of the Union address, Trump stated that even though the Supreme Court recently ruled he lacked authority under the International Emergency Economic Powers Act to impose tariffs, he will continue to push forward with his tariff agenda.

However, since the president needs congressional approval to impose additional tariffs, the scope of new tariffs under this law is expected to be severely limited.

HSBC Raises Key Targets; Nvidia Earnings Coming Soon

This positive sentiment will be tested later today as AI darling Nvidia (NASDAQ: NVDA) reports its latest earnings after the market closes.

The world’s most valuable chipmaker has beaten sales expectations for 13 consecutive quarters, so the magnitude of the beat is key. According to LSEG data, quarterly profit through January is expected to grow 62%, with revenue soaring 68%.

Back in Europe, several major companies have also released earnings for investors to analyze.

Europe’s largest lender, HSBC (LON: HSBA), exceeded full-year profit expectations despite a 7% decline in pre-tax profit, and set a higher-than-expected net interest income target for 2026, indicating that the bank’s restructuring plans are complete and further growth is within reach.

E.ON (ETR: EONGn) reported 2025 earnings in line with analyst expectations and increased its five-year investment plan to €48 billion, but the largest European energy network operator forecasted lower net profit in 2026 compared to this year.

Italian aerospace and defense group Leonardo (BIT: LDOF) posted its strongest performance in three years, with new orders in its aerospace division surging 55%, net debt nearly halved, and record orders from Europe’s increased security spending translating into a robust investment pipeline.

Diageo (LON: DGE) cut its annual sales and profit guidance for the second time in four months and reduced dividends, as the world’s largest spirits maker struggles with weak demand in the U.S. and China.

Nordex (ETR: NDXG) beat expectations with its Q4 results and issued a forecast for fiscal 2026 above market consensus. The German wind turbine manufacturer also raised its medium-term profit targets.

Adecco Group (SIX: ADEN) reported Q4 earnings above expectations, but its gross margin fell short of guidance, raising concerns about the profitability trend of this global HR leader.

German Economy Grew in Q4

Additionally, earlier Wednesday, data confirmed that Germany’s economy grew 0.3% quarter-on-quarter in Q4 2025, improving from zero growth in the previous three months.

There are also some less optimistic signals to digest. The GfK Consumer Confidence Index indicates that German consumer confidence is expected to unexpectedly worsen in March.

Released by GfK Market Research and the Nuremberg Institute for Market Decisions, the index fell from a revised -24.2 points in February to -24.7, contrary to expectations of an increase to -23.1.

Crude Oil Prices Remain High

Oil prices rose on Wednesday, remaining near a seven-month high, amid upcoming nuclear talks between the U.S. and Iran, with market concerns about potential conflict.

Brent crude futures increased 0.4% to $70.86 per barrel, while U.S. WTI crude futures rose 0.5% to $65.93 per barrel.

Both contracts remain near their highest levels since early August, as the U.S. has deployed military forces in the Middle East, pressuring Iran to negotiate an end to its nuclear program.

U.S. special envoys, including Special Representative Steve Wittekoff and presidential advisor Jared Kushner, will meet with Iranian representatives in Geneva on Thursday, aiming to reach a nuclear agreement.

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