European stock markets opened mixed on Wednesday after their worst daily loss so far this year on Tuesday. Investors hope that a positive corporate earnings season will ease concerns about the surging COVID-19 in India.
Analysts at Morgan Stanley, in a note, said that they believe the Q1 earnings season will be strong. Moreover, they also expect European companies to improve on the beat posted in 4Q ‘20.
According to them, the European/global macro data remain supportive. Moreover, upgrades to EPS estimates in the run-up to reporting season have lifted European earnings revisions to the top of their 5-year range.
On Tuesday, India reported its worst daily death COVID toll from the world’s highest number of new daily cases. Due to this, the government imposed a six-day lockdown throughout much of the country.
Simultaneously, many countries have put India, the world’s second-most populous country, on their banned travel list.
Stocks on The Move
The DAX futures contract in Germany traded 0.2% higher at 3:05 AM ET (0705 GMT). In the UK, the FTSE 100 futures contract added 0.2%, while CAC 40 futures in France fell 0.1%.
Set to be in focus is the Dutch paints company, Akzo Nobel. It has a 90% increase in Q1 profit while announcing a $1.2 billion share buyback program.
The stock has already hit a series of record highs this year, with its paints and coatings business gaining momentum and market share.
ASML, the Dutch maker of chipmaking equipment, raised its 2021 guidance after Q1 net profit soared. Meanwhile, Roche confirmed its guidance for this year despite its sales slightly falling in Q1.
Some tech shares and companies that benefited from stay-at-home demand could still face pressure. This comes after U.S. streaming company Netflix reported disappointing subscriber growth for its movie streaming service late Tuesday.
Back in Europe, the U.K. consumer price inflation edged up 0.7% on the year in March, slightly below the 0.8% expected. This illustrates that the Bank of England is under no immediate pressure to tighten its ultra-easy monetary policies.
The STOXX index of 600 European shares gained 0.7% at 436.76 points. A 1.9% fall on Tuesday, its worst session this year, was overdone. Moreover, the benchmark stays near its record high of 443.61 points hit on Monday, analysts said.
MSCI’s index of global shares lost 0.2%. The index had reached record highs as well on Monday.