(Reuters) – European stock markets crept higher on Tuesday as investors awaited the first flood of second quarter earnings releases, with London’s FTSE 100 .FTSE boosted by a first-quarter pickup in sales for Burberry ( BRBY.L ).
FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, July 15, 2019. REUTERS/Staff/File Photo Shares in the British luxury brand surged 8.5%, putting it on course for its best day in 7 years, as investors cheered the first signs of results for new designs by creative chief Riccardo Tisci, part of a broader brand reboot.
Italian shares .FTMIB dipped 0.2% as Fiat Chrysler ( FCHA.MI ) slid 3.7% after Goldman Sachs recommended selling the carmaker, while Germany’s DAX was propped up by a ruling for chemicals firm Bayer cutting damages it must pay in a U.S. court case.
That left the pan-European stocks benchmark up just 0.08% by 0805 GMT, with eyes moving to UK jobs and wages data, Italy’s June inflation and Germany’s ZEW business sentiment index for July.
Software and technology company SAP ( SAPG.DE ), semiconductor player ASML ( ASML.AS ) and drugmaker Novartis ( NOVN.S ) are all among those due to report results this week as the second-quarter reporting season accelerates.
“Markets are in a wait-and-see mode, we are in the earnings season now,” said Amrit Panesar, senior trader at Accendo Markets, in London.
“We had a really good start to this year, the market is now a lot more buoyant on results and earnings which could determine where the markets are going to head to next.”
In the United States, lender Citigroup posted better-than-expected results on Monday but reported a decline in net interest margin, underlining the risks for financial firms as central banks ease policy to head off the risk of recession.
JPMorgan Chase & Co ( JPM.N ), Goldman Sachs Group Inc ( GS.N ) and Wells Fargo ( WFC.N ) will all report earnings on Tuesday.
“If Goldman and JPM have good results you could see it have an impact in the sector in Europe, especially in UK stocks such as Barclays, UBS and Llyods,” said Accendo’s Panesar.
Investors will be watching for U.S. June retail sales data, expected to have risen 0.1%, later in the day to gauge the extent of a Federal Reserve rate cut this month.
European stocks have rebounded from their worst falls in more than two years in May, driven by expectations that major central banks will further loosen monetary policy to boost growth and offset the impact of a protracted trade war.
Denting optimism around progress in U.S.-China trade talks, U.S. President Donald Trump said Washington could pile on more pressure on China, pointing to slowing economic growth in China as evidence that U.S. tariffs were having “a major effect”.
Trade-sensitive auto .SXAP and tech .SX8P stocks both dipped.
Reporting by Susan Mathew and Amy Caren Daniel in Bengaluru; editing by Patrick Graham
LINK ORIGINAL: Reuters