European stocks open higher; earnings to dominate

European stocks traded higher morning Tuesday with corporate earnings dominating market moves.

The pan-European Stoxx 600 was up 0.3 percent in morning trade.

Several firms are reporting earnings Tuesday, including Renault, Novartis and Swedbank.

Basic resources stocks were outperforming other sectors in European trade, increasing more than 2 percent.

The Norwegian aluminum Norsk Hydro beat expectations when reporting a smaller drop in its underlying profits to about $179 million. Higher aluminum prices have offset lower metal sales and effects of negative currency.

The Telecoms sector was also among the best performers, going up about 2 percent in morning trade. Orange, the French telecom company reported Tuesday morning an increase in earnings before interest, taxes, depreciation and amortization (EBITDA) of 1.6 percent in the third quarter to $3.91 billion. It saw an increase of 845 000 new mobile contracts in the same period.

Meanwhile, technology stocks were down 0.6 percent. According to Bloomberg, Twitter could reduce as much as 8 percent of its staff. The announcement could take place before the company releases its third-quarter earnings, due on Thursday.

Apple is presenting its earnings later on Tuesday.

More corporate earnings

Syngenta announced Tuesday morning sales of $2.5 billion in the third quarter of this year, slightly below a Reuters estimate of $2.6 billion. The Swiss agribusiness firm is delaying into 2017 its deal with ChemChina to allow competition authorities to conclude their work. On Monday, the stock saw its shares falling as much as 9 percent after media reports announcing the delay.

Novartis saw its net income going up by 7 percent in the third quarter, but earnings per share (EPS) went down about 3 percent. EPS stood at $1.23.

Banks

Bank stocks were among the worst-performing during Tuesday trading, falling more than 0.5 percent.

The Italian Banco Monte Dei Paschi Di Siena saw shares going up after announcing a capital increase and cuts in workforce. However, the Italian lender has said it could see a full-year loss of about $5.2 billion.

Swedbank surprised on Tuesday morning when it announced a net profit increase of $541 million in the third quarter of 2016.

German DAX hits a 2016 high

The German index touched new territory on Tuesday hitting 10,827.72 points.

The stock was pushed higher after the German IFO institute said that the business climate in the largest euro zone economy continued to rebound in October. The institute’s business climate index reached 110.5 this month, compared to 109.5 in September.

Earlier on Tuesday, data showed business climate going slightly downwards in France in the month of October. The French statistical office said its business confidence reading stood at 101 this month, down from 102 last month.

The International Energy Agency said Tuesday that global demand for oil is set to decrease next year to 1.2 million barrels per day. This represents a fall of 0.4 million barrels a day compared to 2016.

Oil prices remain at the $50 level.

Source: CNBC

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