European stocks mixed; German industrial production weighs while BP shines

By Peter Nurse

Investing.com - European stock markets traded in a mixed fashion Tuesday, with weak German industrial production data weighing while strong results from oil giant BP (NYSE:BP) helped the U.K. outperform.

At 03:50 ET (08:50 GMT), the DAX index in Germany traded 0.1% lower, the CAC 40 in France traded flat, while the FTSE 100 in the U.K. climbed 0.5%.

German industrial production fell more than expected in December, slumping 3.1% on the previous month, far weaker than the expected drop of 0.7%. On an annual basis, industrial production was 0.6% lower than in 2021 and down 5.0% from the pre-pandemic year of 2019.

This disappointing report fears concerns of a dramatic slowdown in the Eurozone’s largest economy this year, especially with the European Central Bank policymakers keen to continue to increase interest rates in order to combat inflation.

The Federal Reserve also raised interest rates last week, and investors will focus on a speech by Fed Chair Jerome Powell at the Economic Club of Washington D.C. later in the day.

The strength of Friday’s U.S. jobs report rattled stock markets as it suggested the Fed had more headroom to keep rising interest rates, and thus his comments on the U.S. economy and monetary policy will be closely studied.

In the corporate sector, BP stock rose 3.9% after the energy giant posted a record profit in 2022 of just under $28 billion, announcing it will buy back nearly $3B worth of shares and increase its dividend by 10%.

Elsewhere, BNP Paribas (EPA:BNPP) stock rose 1.3% after the Eurozone's biggest lender raised its 2025 targets even after missing market expectations for the fourth quarter after an increase in funds set aside for bad loans.

The French bank also said it will execute share buybacks each year — particularly in 2023, when its share buyback program will total €5B (€1=$1.0713).

On the flip side, Carlsberg (CSE:CARLa) stock fell 1.5% after the world’s third-biggest brewer forecast a drop in organic operating profit growth in 2023 as higher beer prices are expected to dent consumption.

Oil prices rose Tuesday, helped by continued optimism over the recovery in demand from China, the largest crude importer in the world, this year.

Saudi Arabia, the world's top oil exporter, raised prices for its flagship crude for Asian buyers late Monday for the first time in six months, expecting increased demand from the region, especially from China.

This followed International Energy Agency head Fatih Birol stating over the weekend that early signs pointed to a stronger-than-anticipated rebound in China’s economy.

Supply outages also helped the tone, with Turkey halting flows to its Ceyhan export terminal after a major earthquake, while a power outage hit Norway’s Johan Sverdrup field.

By 03:50 ET, U.S. crude futures traded 2.4% higher at $75.90 a barrel, while the Brent contract rose 2.1% to $82.70.

Additionally, gold futures rose 0.3% to $1,885.50/oz, while EUR/USD traded 0.2% lower at 1.0713.