Investor sentiment received a boost on Tuesday as concerns over U.S. tariffs subsided, following President Donald Trump's announcement to postpone tariffs on Canada and Mexico. With the tariff delay, there's renewed optimism that similar duties might be avoided between the U.K. and the EU. This positive sentiment shifted investors' attention toward corporate earnings, resulting in a prosperous trading session across most European markets.
The pan-European Stoxx 600 index edged up by 0.22%, while Germany's DAX gained 0.36% and France's CAC 40 rose by 0.66%. Conversely, the U.K.'s FTSE 100 finished slightly down by 0.15%, and Switzerland's SMI also declined by 0.57%.
Elsewhere in Europe, markets in Greece, Iceland, Ireland, the Netherlands, Norway, Poland, Portugal, Spain, Sweden, and Turkey closed higher, while Belgium posted a slight increase. In contrast, Denmark, Finland, and Russia experienced declines, and Austria ended the day unchanged.
The U.K. market saw Entain surge by 5.8%, with Marks & Spencer up by 3.3% and Scottish Mortgage advancing by 2.5%. Gains of 1.6% to 2% were also noted for IAG, Glencore, J Sainsbury, and Endeavour Mining. Meanwhile, Shell, Tesco, HSBC Holdings, Barclays Group, Schroders, Rio Tinto, Fresnillo, and F&C Investment Trust recorded modest gains.
Vodafone's shares fell nearly 7% following the company's report of yet another revenue decline in its critical German market during the third quarter. Despite this, Vodafone's adjusted EBITDAaL in Q3 rose organically by 2.2% to 2.8 billion euros, with total revenue climbing by 5.0% to 9.8 billion euros and service revenue increasing organically by 5.2% to 7.9 billion euros.
Diageo, a leader in the spirits industry, saw an early 4% drop after withdrawing its long-term sales growth targets. The stock partially recovered to close with a 1.3% decline. Shares in Vistry Group, Ashtead, AstraZeneca, GSK, BAE Systems, Severn Trent, BT, Convatec Group, Reckitt Benckiser, and Compass Group dipped between 1.2% and 2.2%.
In Germany, Infineon surged nearly 10% after upgrading its full-year revenue forecast, alleviating concerns about automotive demand. Infineon's strong quarterly results reinforce an expected Q2 revenue of 3.6 billion euros. SAP and Brenntag both gained over 1.5%, while companies such as Hannover Re, Porsche, Bayer, BASF, Munich RE, BMW, and Volkswagen saw increases ranging from 0.4% to 1.1%. On the downside, Sartorius, Merck, Siemens Energy, Symrise, Qiagen, Beiersdorf, Deutsche Bank, and MTU Aero Engines faced losses between 1% and 2.6%.
In France, Dassault Systèmes jumped approximately 8.5% following better-than-expected quarterly profits, with net income rising to 412 million euros from 330 million euros the previous year. BNP Paribas advanced 3.75% after unveiling a new share buyback and a higher-than-expected dividend. Gains were also reported for STMicroelectronics, Publicis Groupe, TotalEnergies, Teleperformance, Kering, ArcelorMittal, Essilor, AXA, Stellantis, and Capgemini, with increases of 1.8% to 2.7%. Vinci, Thales, Société Générale, Engie, Bouygues, Veolia, Crédit Agricole, and Saint-Gobain concluded on a strong note, while Pernod Ricard, Sanofi, Danone, Eurofins Scientific, Legrand, Edenred, Michelin, and L'Oreal suffered declines of 1% to 2%.
On the economic front, France's government budget deficit narrowed to 156.30 billion euros in the January-December period of 2024, down from 173.26 billion euros in the same period the previous year. However, new passenger car registrations in France dropped significantly, showing a year-over-year decrease of 6.2% in January 2025, compared to a 1.5% rise in December 2024.
