European stocks rose slightly on Tuesday, as investors turned attention to company earnings and US retail sales data, as they hope to gauge how the corporate world had fared after more than a year of rising global interest rates.
Europe’s region-wide Stoxx 600 added 0.2 per cent, recouping losses from the previous session, while Germany’s Dax and France’s Cac 40 was flat.
London’s FTSE 100 rose 0.1 per cent, led higher by online retailer Ocado, which said its retail division was “making good progress, with a return to profitability” in the second quarter.
Shares of Norway-based hydrogen technology provider Nel jumped almost 12 per cent, topping the Stoxx 600 index, after the company reported its order intake was up 81 per cent in the second quarter of 2023, compared with the same period last year.
Meanwhile, contracts tracking Wall Street’s tech-focused Nasdaq 100 lost 0.1 per cent, while those tracking the benchmark S&P 500 were flat ahead of the New York open. Both indices hit 15-month highs on Monday, as investor sentiment picked up amid an encouraging corporate earnings season.
Attention is turning to big US banks, including Bank of America and Morgan Stanley, which report their earnings on Tuesday, while tech heavyweights Tesla and Netflix are set to follow on Wednesday.
Big banks started the earnings season last week on a strong note, with JPMorgan and Wells Fargo reporting forecast-beating profits for the second quarter, amid lingering investor concerns over lenders’ balance sheets following the collapse of several regional banks in the spring.
Traders will also be watching the release of US retail sales data later in the day to assess how the country’s consumers have fared as the rate of inflation slows, more than a year after the Federal Reserve began its aggressive monetary tightening campaign.
Economists polled by Reuters forecast the US Census Bureau will report a 0.5 per cent month-on-month increase in overall retail sales in June, up from 0.3 per cent in the previous month.
Upbeat news from the corporate world helped offset investors’ concerns over weak growth data from China, which on Monday triggered a sell-off in European and Asian equities, due to fears that the post-pandemic recovery of the world’s second-largest economy has run out of steam.
“The data weighed in particular on European equities, being generally more exposed to China,” said Jim Reid, head of global fundamental credit strategy at Deutsche Bank. However, he added, this weakness “wasn’t anywhere near as obvious in the US”.
Asian equities continued to slip on Tuesday, with the Hang Seng index declining 2.1 per cent after Hong Kong markets resumed trading following a day-long halt triggered by a storm.
China’s CSI 300 index of mainland-listed equities fell 0.3 per cent and South Korea’s Kospi slid 0.4 per cent. Japan’s Topix index was the region’s outlier, climbing 0.6 per cent.