European Stocks Flat: Earnings Determine Direction
European stock markets began trading on Wednesday (February 4) with cautious movement: most indexes rose only slightly, as if the market was "holding its breath" awaiting direction from a flood of major issuer earnings reports. The Stoxx 600 Index moved almost flat shortly after opening, while major exchanges showed slight gains—the UK's FTSE rose nearly 0.5%, Germany's DAX around 0.3%, and France's CAC 40 led the way with a gain of around 0.7%. In Italy, the FTSE MIB also rose around 0.7%.
The market mood improved after the previous session was disrupted by a brief sell-off in crypto and precious metals, which had put investors on the defensive. After the dust settled, market participants returned to the most crucial issue of the week: earnings—whether company performance was strong enough to justify valuations, particularly in the financial and healthcare sectors.
On the corporate side, Banco Santander actually fell by around 3.5% despite announcing a major plan: the Spanish bank will acquire Webster Bank in the US in a transaction of approximately $12.2 billion. At the same time, Santander released its fourth-quarter results early, posting a net profit of €3.76 billion, beating market expectations, and announced a new €5 billion share buyback—but the market seemed more concerned about integration risks and the acquisition price.
In the healthcare sector, the spotlight was on Novo Nordisk, which fell sharply by -18% in early trading. The market reacted after the company warned that its growth rate this year would slow, driven by pricing pressures in the US and the end of exclusivity for Wegovy and Ozempic in several countries (including China, Brazil, and Canada). Meanwhile, the earnings release schedule remained packed—from Novartis, GSK, Infineon, Equinor, Credit Agricole, Handelsbanken, Carlsberg, and OMV.
Meanwhile, UBS fell around 1.8% despite posting solid fourth-quarter results: net profit of $1.2 billion, up 56% year-on-year and beating consensus. This negative reaction suggests the market is still sensitive: not just about whether the report is good or not, but also about how high expectations have already been set before the report is released.
Source: Newsmaker.id
