European stocks mixed; Barclays shines after overhaul, share buyback

Investing.com - European stock markets traded in a mixed fashion Tuesday, as investors digested a bigger-than-expected cut in China’s benchmark lending rate amid persistent concerns of slowing growth, while Barclays soared after announcing a strategic overhaul. 

At 03:05 ET (08:05 GMT), the DAX index in Germany traded 0.1% lower, the FTSE 100 in the U.K. fell 0.1%, while the CAC 40 in France traded 0.1% higher.

China announces rate cut to support property market 

Sentiment remains weak in Europe Tuesday, as investors continued to fret over slowing economic growth and worries that the European Central Bank, as well as the U.S. Federal Reserve, will keep interest rates at elevated levels for longer than seemed likely at the start of the year.

The decision of the People’s Bank of China earlier Tuesday to cut its 5-year loan prime rate, which is used to determine mortgage rates, by a bigger-than-expected 25 basis points to 3.95%, has provided some support, but it has also the difficulties the Asian giant is having in its important property market.

The European economic data slate sees the release of the December eurozone current account numbers, but most eyes are likely to be on the release of fourth-quarter negotiated wages data given the importance the ECB has placed on wage growth as its attempts to contain inflation. 

Barclays announces share buyback as well strategic overhaul

Barclays (LON:BARC) was in the spotlight Tuesday, with its stock soaring 6% after the British lender reported a fourth-quarter net loss of £111 million ($1 = $1.2591) while announcing an extensive strategic overhaul, including substantial cost cuts, asset sales and a reorganization of its business divisions.

The ban sweetened the pot by also announcing an additional share buyback of £1 billion, while promising to return £10 billion to shareholders between 2024 and 2026 through dividends and share buybacks. 

InterContinental Hotels Group (LON:IHG) stock fell 0.4% despite the company stating that it expects to return more than $1 billion to shareholders this year, including $800 million in share buybacks, after reporting a strong result in 2023.

The auto sector is also likely to be in focus after data showed that new car sales in the European Union rose 12.1% year-on-year in January, helped by double-digit growth in Germany and Italy.

Crude remains near three-week highs

Oil prices traded in a muted fashion Tuesday near three-week highs, as traders digested the Chinese interest rate cut as well ongoing Middle Eastern geopolitical tensions.

By 03:10 ET, the U.S. crude futures traded 0.1% lower at $78.36 a barrel, while the Brent contract dropped 0.1% to $83.50 a barrel. There was no settlement for the U.S. contract on Monday due to a public holiday.

Prices remained underpinned by persistent concerns over supply disruptions in the Middle East, even as the United States called for a temporary ceasefire in the Israel-Hamas war, opposing a major ground offensive by its ally Israel in the city of Rafah in southern Gaza.

Additionally, gold futures rose 0.4% to $2,032.95/oz, while EUR/USD traded 0.1% lower at 1.0773.