European markets rose on Wednesday with oil prices seeing a rebound as concerns receding over the rapid decline in China’s exports amidst generally positive corporate results.
Shares of Inditex, the owner of the Zara clothing outlets and Prudential, the UK insurer rose after reporting earnings whilst the results of French supermarket Casino and Deutsche Post were not so well-received.
Inditex same store sales continue to expand at an impressive clip of 8.5% y/y and its aggressive store expansion plan of 500 extra outlets a years is set to continue supporting growth. The expansion online was not such an issue for gross margins in the 4th quarter and so far other fashion houses have been unable to catch up with the nimbleness of Zara’s supply chain..
Chinese stocks edged down in response the to the negative day on Wall Street that saw the S&P 500 cap a five-day winning streak, but a bounce back in the price of oil has limited losses.
Progress in European markets has been at a standstill since it emerged that the European Central Bank was beginning to second-guess its own hints at further easing. During the same period the euro has gained in value since consensus of a 10bps would likely be viewed as a disappointment by markets.
A mixed performance from highly weighted mining and oil companies has made for a slightly positive FTSE 100. Utilities companies SSE and Centrica are amongst the top risers on relief over French competitor EON’s kitchen sink approach to writing down German power plant assets.
Prudential shares jumped after the insurer announced a special dividend backed up by a 22% rise in pre-tax operating profits in 2015. Profits were most impressive in the life-insurance unit while its M&G fund management division saw outflows as retail investors pulled funds during volatile markets. The diversification of Prudential’s businesses with its Asian-focus helped it weather the storm of claims over the UK floods in December.
US stocks look set for a positive open on Wednesday as crude oil prices rise ahead of DOE weekly inventory figures with earnings to be reported by Twitter co-founder Jack Dorsey’s second company Square.
USA pre-opening levels
S&P 500: 6 points higher at 1,985
Dow Jones: 48 points higher at 17,012
Nasdaq 100: 11 points higher at 4,276
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