European Stocks Rise Amid Hopes for Russia-Ukraine Peace Talks

European stock markets showed broad gains on Thursday, driven by optimism surrounding potential peace negotiations in the Russia-Ukraine conflict. However, U.K. equities lagged behind, with the FTSE 100 declining due to disappointing earnings reports, ex-dividend adjustments, and a stronger British pound following positive economic data.

U.K. Economic Growth Defies Expectations

The U.K. economy posted unexpected growth in the fourth quarter, supported by expansion in the services and construction sectors, according to the Office for National Statistics. Gross domestic product (GDP) increased by 0.1% compared to the previous quarter, defying analysts’ predictions of a 0.1% contraction. This follows a period of stagnation in the third quarter. On an annual basis, GDP growth for the fourth quarter reached 1.4%, up from 1.0% in the preceding quarter.

Germany Sees Inflation Moderation

Germany's inflation rate cooled at the beginning of the year, aligning with preliminary estimates. Data from Destatis, the country's statistical office, showed that consumer prices rose 2.3% year-over-year in January, down from December’s 2.6%—the highest inflation rate in nearly a year. Inflation based on the harmonized index of consumer prices remained steady at 2.8%.

Stock Market Performance Across Europe

The pan-European STOXX 600 gained 0.2% to reach 548.93, building on a 0.1% increase from the previous session. Germany’s DAX surged 0.8%, France’s CAC 40 climbed 0.7%, while the U.K.’s FTSE 100 declined 0.9%.

Company-Specific Market Movements

• Orange SA: The French telecom giant surged 2.6% after successfully meeting its 2024 targets.

• EssilorLuxottica: The Ray-Ban maker rallied 3% following a 9.4% rise in operating profit last year.

• Barclays: The British banking giant tumbled 5% despite reporting strong annual results and announcing a £1 billion share buyback plan.

• British American Tobacco: The tobacco company saw its stock plummet 8% after delivering a mixed set of results.

• Delivery Hero SE: The German online food delivery firm soared 6.4% after surpassing Q4 growth expectations.

• Thyssenkrupp AG: Shares in the German industrial conglomerate surged 10% following an improved cash flow outlook, aided by a €1 billion ($1.04 billion) advance payment for a submarine contract with the German military.

• Siemens AG: The technology giant jumped 5.4% after posting better-than-expected Q1 results and reaffirming its FY 2025 organic growth guidance.

• Nestlé: The Swiss food giant climbed nearly 6% after exceeding sales growth expectations in the final quarter of 2024.

European markets remained upbeat amid hopes of a peace settlement in the Russia-Ukraine war and encouraging economic indicators. While Germany experienced cooling inflation and France's market performed well, the U.K. market faced downward pressure due to corporate earnings disappointments and currency strength. Investors continue to monitor economic data, inflation trends, and geopolitical developments for further market direction.