© Reuters
By Scott Kanowsky
Investing.com — European stock markets opened broadly higher on Tuesday, continuing the previous session’s positive tone as investors digest quarterly earnings from the banking sector, while a key guide of German business sentiment came in above expectations.
At 03:20 ET (07:20 GMT), the pan-European rose 0.40%, the in Germany traded 0.17% higher, the in France climbed 0.64%. Meanwhile, the fell slightly by 0.36% as Rishi Sunak gets set to become the U.K.’s newest prime minister later this morning.
European equity markets started the week strongly, with both the DAX and the CAC 40 increasing by 1.6% on Monday, tracking gains on Wall Street as investors bet that a pronounced economic slowdown could push the Federal Reserve into softening its hawkish stance.
Aside from central bank decisions, with the European Central Bank widely expected to lift again on Thursday, investors are focusing on the quarterly corporate earnings season, with investment banks reporting this week.
UBS Group AG (SIX:) reported a 24% fall in third quarter net profit on a decline in market activity, although it due to a rise in client funds. Shares in the Swiss banking giant advanced by more than 2% in early dealmaking.
London-based rival HSBC Holdings PLC (LON:) reported a 42% drop in third quarter pretax profits on the back of losses on the sale of its French unit and rising bad loans, but its interest income surged with rates rising around the world. Shares slumped by around 5%.
Elsewhere, Swiss drugmaker Novartis AG (SIX:) revealed a drop of 4% in quarterly operating income as competition weighed on prescriptions of multiple sclerosis drug Gilenya, while Norwegian aluminum producer Norsk Hydro ASA (OL:) third quarter profits well above expectations.
Additionally, shares in SAP SE (ETR:) rallied after the business software maker faster-than-expected revenue growth in the third quarter.
Investors will also study the October release of the , which showed a smaller-than-expected drop in corporate confidence during the month.
Concerns remain that Germany is heading for recession as the energy standoff with Russia, rising prices, and supply bottlenecks take their toll.
Oil prices were lower, reversing earlier gains, amid continued fears over slowing global demand growth, particularly from China, the world’s largest importer of crude.
The latest estimate of U.S. crude oil inventories from the is due later in the session and is expected to rise after last week’s surprise 1.3 million barrel fall.
By 02:30 ET, traded 0.46% lower at $84.16 a barrel, while the contract fell 0.41% to $90.84.
Additionally, fell 0.19% to $1,650.90/oz, while traded mostly flat at 0.9862.
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