European markets open higher as investors focus on euro zone data, earnings; Rolls-Royce jumps 8% – CNBC
European markets opened higher Thursday ahead of a busy day of earnings and data in the region.
European markets
The pan-European Stoxx 600 index opened 0.9% higher, with the vast majority of sectors trading in the green. Autos stocks were up 1.9%, while food and beverage was down 0.8%.
Shares of food giant Nestle fell 3.7% after the company reported lower than expected full-year sales as inflationary pressures weighed on consumer demand.
Preliminary services and manufacturing purchasing managers’ index data from the euro zone in February is due Thursday, and will serve as a gauge of business activity in the region.
Earnings are out from Zurich Insurance, Iberdrola, Telefonica, Lloyds Banking Group, Rolls-Royce, WPP, Anglo American and Hargreaves Lansdown.
Overnight, Japan’s Nikkei hit a record high on Thursday, with investors shrugging off dismal business activity data from the country, while other Asia-Pacific markets traded in the green. S&P 500 futures rose in overnight trading Wednesday, boosted by a jump in Nvidia shares.
Rolls-Royce shares jump 8% after 2023 profits more than double
A Rolls Royce jet engine on display at the Rolls-Royce aircraft jet engine production and repair facility in Blankenfelde on February 28, 2023 near Berlin, Germany.
Omer Messinger | Getty Images News | Getty Images
Rolls-Royce shares jumped more than 8% in early trade in London after the British aerospace group more than doubled its annual profits in 2023 and forecast further momentum this year.
Rolls-Royce, which manufactures jet engines for commercial aircraft along with power systems for ships and submarines, reported an underlying operating profit of £1.6 billion ($2 billion) in 2023, more than double the £652 million posted in 2022.
“Our transformation has delivered a record performance in 2023, driven by commercial optimisation, cost efficiencies and progress on our strategic initiatives,” CEO Tufan Erginbilgic said in a statement.
“This step-change has been achieved across all our divisions, despite a volatile environment with geopolitical uncertainty, supply chain challenges and inflationary pressures.”
The group forecast underlying operating profit growth of at least 6% in 2024, putting the annual figure in the range of £1.7 billion to £2 billion.
Rolls-Royce was the top performer in Britain’s FTSE 100 in 2023, soaring over 200% on the back of a profit forecast upgrade and the announcement in November that profits could quadruple by 2027.
– Elliot Smith
Nestle down 4.8% as inflation pushes sales lower
Shares of Swiss food giant Nestle were down 4.8% in early trade after reporting lower than expected sales for the full year as inflation continued to weigh on consumer demand.
CEO Mark Schneider told CNBC that the company expects food inflation to fall but that some “choppiness” will remain as certain commodity prices remain at record highs.
— Karen GIlchrist
Stocks on the move: Delivery Hero down 6.2%, Indivior up 16.7%
Shares of Delivery Hero were down 6.2% in early deals, following news that it ended negotiations around the potential sale of its Foodpanda business in selected Southeast Asian markets.
On the other end, U.K. pharmaceuticals business Indivior was up 16.7% after recording a fourth-quarter pre-tax profit amid higher revenues. The company announced that it is considering shifting its primary listing to the U.S.
— Karen Gilchrist
CNBC Pro: JPMorgan reveals its favorite European stocks — giving one over 93% upside
CNBC Pro: Where do Treasury yields go from here? Morgan Stanley’s Jim Caron weighs in
Treasury yields shot up last year, and investors flocked to allocating to cash which have yielded around 5% or even more.
Those yields have since dropped, and Wall Street are widely expecting them to go fall even further, leading investors to exit cash and get into other income-generating assets. But recent stronger-than-expected economic data on consumer and producer prices has raised the possibility that the U.S. Federal Reserve will cut rates later rather than sooner.
CNBC Pro subscribers can read more here about where these yields may be headed, according to Morgan Stanley Investment Management’s Jim Caron. He also outlined three scenarios for the 10-year yield, explaining how each could affect stocks.
— Weizhen Tan
European markets: Here are the opening calls
European markets are set to open higher Thursday.
The U.K.’s FTSE 100 index is expected to open 23 points higher at 7,665, Germany’s DAX up 96 points at 17,205, France’s CAC 55 points higher at 7,863 and Italy’s FTSE MIB up 222 points at 32,289, according to data from IG.
Earnings are due from Nestle, Zurich Insurance, Iberdrola, Telefonica, Lloyds Banking Group, Rolls-Royce, WPP, Anglo American and Hargreaves Lansdown. Preliminary services and manufacturing purchasing managers’ index data from the euro zone in February is due Thursday.
— Holly Ellyatt
