European markets open to close, earnings, data and news

European markets were upbeat in the first session of the week, closing up 0.9% as investors braced for U.S. inflation data and a euro zone GDP estimate Tuesday.

France’s CAC 40 powered 1.1% higher as the U.K.’s FTSE 100 rose 0.75% and Germany’s DAX gained 0.6%.

Household goods was the best-performing sector, up 2%.

Swedish aerospace and defense firm Saab topped European stocks in afternoon trade, up 7.2% on the day.

On Friday the company reported net income was up 51% in 2022 and said the war in Ukraine would result in more orders.

Property firm Castellum remained at the bottom of the Stoxx 600 index, down 6.3%, as it said net income last year tumbled from 11.8 billion Swedish krone ($1.13 billion) to 1.75 billion krone.

— Jenni Reid

U.S. stocks rose slightly at Monday’s open as traders regained their footing after the S&P 500 and Nasdaq Composite suffered their worst weekly declines in nearly two months.

The S&P 500 climbed 0.17%. The Dow Jones Industrial Average rose 41 points, or 0.12%, while the Nasdaq composite climbed 0.29%.

Investors will be looking ahead to inflation data due Tuesday. The report will show how if disinflation is continuing, signaling what the Federal Reserve may do next.

—Carmen Reinicke

The Turkish Mediterranean port of Ceyhan fully resumed crude oil loadings, after operations at one of its terminals were disrupted in wake of two earthquakes that ravaged Turkey and Syria last week.

An oil tanker loaded crude oil from the Baku-Tbilisi-Ceyhan terminal on Feb. 12, according to two trade and one shipping source, who could only comment on condition of anonymity. The vessel was the MT Nordlotus, with the tanker Alfa Baltica now preparing to berth on Monday, the shipping source said.

The BTC terminal exports the majority of seaborne Azeri crude oil volumes. Terminal loadings were disrupted following two deadly earthquakes that rocked Turkey and Syria last Monday, leaving over 33,000 dead.

The Botas terminal — which is also a part of the broader Ceyhan port — has been able to continue operations throughout.

The BTC terminal typically releases its monthly export schedule on the 8^th of the month that precedes loading. A BTC loading schedule for March has so far yet to emerge.

The restart of the BTC terminal will reinject volumes in a tighter oil market, after Russia on Friday announced it would lower production by 500,000 barrels per day, following Western sanctions on Moscow’s oil and oil products that took effect in recent months.

The Brent contract with April expiry was trading at $85.91 per barrel at 11:30 a.m. London time Monday, down by 48 cents per barrel from the Friday close. The WTI contract with March delivery was at $79.25 per barrel, shedding 47 cents per barrel from the previous settlement.

—Ruxandra Iordache

Corrado Passera, CEO of Illimity bank, outlines the bank’s earnings after the Italian lender slashed its guidance for 2023 despite strong fourth-quarter numbers.

International Monetary Fund managing director Kristalina Georgieva said markets have “good reason to be more upbeat” while speaking at the World Government Summit in Dubai.

Now that it looks as though the U.S. will avoid recession, the U.S. and Europe have “remarkably resilient” labor markets and China has reopened, markets can afford to be “more optimistic,” Georgieva said.

She added that there would be further monetary tightening this year, but the IMF no longer projects that it will continue into 2024.

“We have markets that are in love with good news and they do not keep their ears open for the more neutral nuanced message they’re getting from the Fed, from the European Central Bank,” Georgieva said.

“Markets hear the first part of the sentence, they don’t [hear] the second,” she added.

— Hannah Ward-Glenton

Swedish property company Castellum was at the bottom of the pan-European Stoxx 600 index at the start of trading after its shares lost 8% following fourth-quarter results. The share price recovered slightly within the first half hour of trading, paring losses back to around 4.8%.

Castellum’s net income for the year totalled 1.75 billion Swedish krona ($167 million) in 2022, which comes to 5.29 krona per share. That’s down from 11.8 billion krona in 2021, when the company posted its highest ever earnings and delivered 41.81 krona per share.

The company’s press release notes that the Nordic property market was heavily affected by high inflation levels, rising interest rates, a cautious bond market and global economic slowdown throughout the year.

The company’s board also proposed a rights issue for existing shareholders of around 10 billion krona in the second quarter of 2023 in order to “strengthen its financial position.”

— Hannah Ward-Glenton

Investors are looking toward consumer price index data on Tuesday, as well as retail sales, for the latest gauge on inflation.

Economists polled by Dow Jones forecast a 0.4% increase in headline CPI on a monthly basis, as well as a 6.2% gain from the prior year.

Traders will monitor the CPI reading for a better understanding of how the Federal Reserve will proceed with its monetary policy in its fight against inflation.

— Hakyung Kim

China’s central bank announced strict requirements for commercial banks in how they categorized non-performing assets and other risks.

The measures, set to take effect July 1, said the classification will expand from simply loans to all financial assets that bear credit risk.

The notice also added that banks should classify asset risks in a “timely” and “prudent” manner — according to five categories ranging from “normal” to “loss.”

Shares of Chinese banks fell on Monday, with Ping An Bank leading the losses and trading 2.5% lower.
Agricultural Bank of China’s share price dropped 0.68%, China Construction Bank shed 0.53%, and shares of Bank of China also fell 0.34%.

— Lim Hui Jie

Tech stocks have enjoyed a strong rally this year, and the recent buzz around artificial intelligence has bolstered the feel-good sentiment.

But as investors turn their attention to Big Tech names, one corner of the sector has quietly rebounded from its 2022 lows. Market pros reveal why they are bullish on the sub-sector and name their top stock picks to play it.

Pro subscribers can read more here.

— Zavier Ong

France’s CAC 40 index is set to open 6 points lower, down to 7,116, Italy’s MIB will be 32 points lower at 27,266 and Germany’s DAX index down 25 points to 15,269, according to IG data.

Britain’s FSTE 100 index bucks the trend and is set for a fractionally positive open, up 6 points to 7,878.

— Hannah Ward-Glenton