ECB raises interest rates; Stoxx 600 gains up to 0.9%
The European Central Bank announced it would raise its interest rate by 50 basis points, bringing its policy rate to 2.5%.
The pan-European 600 index reacted by jumping from a 0.5% daily increase to 0.9% in the 15 minutes following the announcement.
A chart to show the Stoxx 600 index.
The rate hike was in line with expectations and follows four increases in 2022.
Full coverage of the ECB’s decision can be found here.
— Hannah Ward-Glenton
Luxury automaker Ferrari beats earnings expectations
Italian luxury car maker Ferrari reported a 16% year-on-year increase in core adjusted earnings for 2022, signaling an “even stronger” year to come.
The company said its adjusted earnings before interest, tax, depreciation and amortization (EBITDA) reached 1.77 billion euros ($1.95 billion) last year, setting a 2.13-2.18 billion euro guidance for 2023.
Ferrari achieved EBITDA of 469 million euros in the fourth quarter, up by 18% on the year — beating analyst expectations closer to 449 million euros, according to a Reuters poll.
Car shipments added 19% on the year to 13,221 units in 2022, driven up by deliveries of the Ferrari Portofino M and the SF90 family, alongside the 296 GTB and the 812 Competizione models, which were in the ramp-up phase.
A Ferrari NV SF90 hybrid vehicle on the opening day of the Paris Motor Show in Paris, France, on Monday, Oct. 17, 2022.
Nathan Laine | Bloomberg | Getty Images
“These figures provide the base for an even stronger 2023, fueled by a persistently high demand for our products worldwide,” said Ferrari CEO Benedetto Vigna.
New York-listed shares of the company rose by 2.63% in after-hours trade at 12:46 am London time.
— Ruxandra Iordache
Bank of England hikes rates by 50 basis points, now sees ‘much shallower’ recession than feared
People walk outside the Bank of England in the City of London financial district, in London, Britain, January 26, 2023.
Henry Nicholls | Reuters
The Bank of England on Thursday hiked interest rates by 50 basis points and dialed back some of its previous bleak economic forecasts.
The Monetary Policy Committee voted 7-2 in favor of a second consecutive half-point rate hike, taking the main Bank rate to 4%, but indicated in its decision statement that smaller hikes of 25 basis points may be in the cards in coming meetings . The two dissenting members voted to leave rates unchanged.
Crucially, the Bank also dropped the word “forcefully” from its rhetoric around continuing to raise rates as necessary to rein in inflation.
The UK’s FTSE 100 index was up 0.5% after the announcement, extending earlier gains.
Read the full story here.
— Elliott Smith
ING’s CFO says net interest income momentum will continue to rise
Tanate Phutrakul, chief financial officer of ING, discusses its better than expected fourth-quarter net profit.
Stocks on the move: Telecom Italia up 11%, Electrolux down 8.5%
Bloomberg | Bloomberg | Getty Images
Telecom Italia shot to the top of European stocks in early trade, rising 11% following reports US private equity firm KKR & Co Inc was preparing to make a nonbinding offer for its fixed-line network.
The network provides key support to the struggling company’s massive debt load, Reuters reported.
Meanwhile, Electrolux dropped 8.5% after warning it would see lower sales this year and may suffer from higher energy and labor costs.
— Jenny Reid
European markets climb ahead of central bank announcements
Europe’s Stoxx 600 was 0.5% higher at the open as investors prepared for interest rate hike decisions from the Bank of England and the European Central Bank this afternoon.
That follows declines in the last three sessions. After the European close Wednesday, the US Federal Reserve announced a smaller 25 basis point rate increase — but gave few hints its hiking cycle was coming to an end.
Germany’s DAX climbed 0.65%, France’s CAC 40 was up 0.6% and the UK’s FTSE 100 was up 0.2%.
Deutsche Bank smashes profit expectations in fourth quarter
Deutsche Bank reported its 10th straight quarter of profit, receiving a boost from higher interest rates and favorable market conditions.
The German lender reported a 1.8 billion euro ($1.98 billion) net profit attributable to shareholders for the fourth quarter, bringing its annual net income for 2022 to 5 billion euros, a 159% increase from the previous year.
It almost doubled a consensus estimate among analysts polled by Reuters of 910.93 million euros net profit for the fourth quarter, and exceeded a projection of 4.29 billion euros on the year.
Read the full story here.
Deutsche Bank share price
CNBC Pro: JPMorgan says Hong Kong shares to rebound in February and names 5 stocks to own
JPMorgan has named five stocks to own amid an expected rise in the broader Chinese stock market in February.
Strategists at the Wall Street bank attributed last week’s sell-off in Hong Kong-listed shares as profit-taking by some investors.
They said the wider stock market will be “grinding higher” this month but rotate into “quality laggards in consumption as well as value cyclical and growth spaces.”
CNBC Pro subscribers can read more about the 5 stocks JPMorgan has named.
— Ganesh Rao
CNBC Pro: Beware of tech stocks — these cash-rich names are a better bet, analysts say
Forget growth stocks like tech. Analysts are recommending that investors go for companies with lots of cash.
The market rallied in January — including the tech-heavy Nasdaq Composite, which rose nearly 10.7% last month for its best monthly performance since July.
But analysts say companies with pricing power are a safer bet than tech, given that inflation is expected to remain high this year and the uncertainty around when the US Federal Reserve will pivot to lower interest rates.
They named three stocks to buy.
CNBC Pro subscribers can read more here.
— Weizhen Tan
CNBC Pro: Worried about Alibaba’s share price slump? Analysts have 4 alternative tech picks
Shares in Alibaba have enjoyed a strong rebound this year, although a recent slump in its share price has got some investors worried.
But the Wall Street favorite is far from the only game in town, with several stocks also offering exposure to the Chinese Internet sector.
Pro subscribers can read more here.
— Zavier Ong
European markets: Here are the opening calls
European markets are heading for a higher open Thursday as markets react positively to the US Federal Reserve’s quarter-point rate hike.
The UK’s FTSE 100 index is expected to open 31 points higher at 7,788, Germany’s DAX 101 points higher at 15,273, France’s CAC up 35 points at 7,109 and Italy’s FTSE MIB up 121 points at 26,870, according to data from IG.
On Thursday, investors in Europe will be focused on the latest monetary policy decisions from the European Central Bank and Bank of England.
It’s a busy day for earnings with Shell, BT Group, Deutsche Bank, Banco Santander, ABB, Julius Baer and Roche reporting.
— Holly Elliott