European Stocks Close Mostly Higher On Earnings, Fed Rate Cut Hopes

(RTTNews) - European stocks closed mostly higher on Wednesday, thanks largely to some strong corporate earnings updates, and expectations of an interest rate reduction by the Federal Reserve in September.

U.S. President Donald Trump's threat the his administration is considering imposition of tariffs on chips and pharmaceuticals rendered the mood a bit cautious and limited markets' upside.

The U.S. President has called a pledge of investment totaling $600 billion made in the EU-U.S. trade deal a gift and threatened the EU with 35% blanket tariffs if it fails on the pledge.

Trump also said that tariffs on semiconductor and chip imports would be announced as soon as next week to boost U.S. manufacturing and that planned tariffs on pharmaceuticals imported into the U.S. could eventually reach as high as 250%.

The pan European Stoxx 600 edged down 0.06%. The U.K.'s FTSE 100 gained 0.24%, Germany's DAX climbed 0.33% and France's CAC 40 closed 0.18% up, while Switzerland's SMI ended down 0.87%.

Among other markets in Europe, Czech Republic, Greece, Ireland, Poland, Portugal, Spain, Sweden and Turkiye closed higher.

Denmark, Iceland, Netherlands and Russia ended weak. Belgium, Finland, Austria and Norway closed roughly flat.

In the UK market, Hiscox surged nearly 10% after announcing an increase to its share buyback programme. The company has increased its maximum aggregate consideration from $175 million to $275 million to return additional capital to shareholders. This expanded initiative includes a boost to the initial tranche, which will now total $137.5 million, up from $87.5 million, and is expected to be completed by the end of Q3 2025.

Fresnillo rallied nearly 9%. Diageo gained 4.2%. BP climbed 3.1%. Vodafone Group, Kingfisher, Centrica, Airtel Africa and Antofagasta gained 2 to 3%.

Coca-Cola Europacific Partners tanked more than 9% after the company trimmed its fiscal 2025 revenue forecast, despite reporting higher first-half results. The outlook revision mainly reflects a weaker consumer backdrop in Indonesia.

Coca-Cola HBC ended nearly 7% down, despite higher earnings, and reiterating full-year guidance.

Glencore closed lower by 5.4%, weighed down by a 14% drop in first half adjusted core profit and scrapping plans to move its primary listing away from London.

Legal & General closed weak, despite the company reporting stronger-than-expected first-half results.

Relx, Pearson, Marks & Spencer, Croda International, IAG, Convatec Group, GSK, Hikma Pharmaceuticals and AstraZeneca also ended notably lower.

In the German market, Vonovia gained about 3.5%, lifted by an impressive 11% growth in first-half earnings. The company has also raised its EBT guidance for the full-year.

Deutsche Bank climbed more than 2.5%. Porsche, Munich RE, Allianz, Heidelberg Materials, BMW, Commerzbank, MTU Aero Engines, Siemens Energy and Mercedes-Benz also closed notably higher.

Fresenius advanced after posting strong Q2 results and raising its full-year revenue guidance.

Bayer closed nearly 10% down. The pharmaceutical and agricultural major reported a wider loss for the second quarter amid challenging market conditions.

Zalando plunged about 9% despite delivering "strong" growth in sales and profits during the second quarter and raising its 2025 guidance.

Beiersdorf closed lower by over 8% as the company cut its full-year guidance and reported weaker-than-expected sales for its core Nivea brand in the second quarter, citing a 0.5% decline in organic sales growth. The company lowered its 2025 outlook for the Consumer division's organic sales growth to 3-4%, down from a previous range of 4-6%..

Fresenius Medical Care, Qiagen, Infineon, Merck, Adidas, Continental and Sartorius lost 1 to 5%.

In the French market, Edenred gained about 3%. Pernod Ricard climbed nearly 2.5%. Accor, Airbus, Credit Agricole, Vivendi, BNP Paribas, Unibail Rodamco, TotalEnergies and Societe Generale also closed notably higher.

Eurofins Scientific, Sanofi, STMicroElectronics and Capgemini lost 2 to 3%. EssilorExottica, Kering, Publicis Groupe and Dassault Systemes also ended weak.

In ecnomic news, the UK construction sector downturn deepened in July as volumes of work carried out across all sectors decreased markedly, survey results from S&P Global showed.

The headline construction Purchasing Managers' Index fell to 44.3 in July from 48.8 in June. The score signaled the sharpest contraction since May 2020.

The survey revealed marked decreases in activity across monitored sub-sectors, but a considerable drag came from a fresh drop in residential building.

Germany's factory orders declined unexpectedly in June on a notable fall in demand from non-EU countries, official data revealed on Wednesday.

New orders fell 1% month-on-month in June, Destatis reported. The fall was sharper than the 0.8% decrease posted in May and confounded expectations for an increase of 1%.

When large-scale orders are excluded, new orders were 0.5% higher than in the previous month.

Data from S&P Global showed the HCOB Construction PMI in France fell to 39.7 in July from 41.6 in the previous month, indicating a deeper contraction in construction activity and marking the sharpest downturn since last September.

Meanwhile, a report from INSEE said private payroll employment in France stalled in the second quarter of 2025, with a decline of 4,800 jobs, bringing the total to 20.97 million — the lowest level in nearly three years, preliminary estimates showed.

A report from Eurostat showed retail sales in the Eurozone increased 0.3% month-over-month in June 2025, rebounding from a 0.3% fall in the previous month. Year-on-year, retail sales in the Euro Area increased 3.1% in June, the most since September 2024, compared to a 1.9% gain in the previous month.

The HCOB Eurozone Construction PMI edged down to 44.7 in July from 45.2 in the previous month, marking its steepest decline since February.