European stocks watch as volatility grips global markets
European stocks were higher on Tuesday as investors in the region appeared to shrug off volatility in global markets at the start of the week, and concerns over Ukraine.
The pan-European Stoxx 600 added 1.2% by mid-morning, with basic resources adding 2.4% to lead gains as all sectors and major bourses started the day in positive territory.
In terms of individual share price movement, Swiss software manufacturer Logitech surged more than 11% after beating quarterly sales expectations and raising its full-year outlook.
Ericsson climbed 7.5% after beating fourth-quarter earnings expectations, with profits bolstered by high demand for 5G network equipment.
At the bottom of the European blue chip index, Danish IT consultancy Netcompany fell more than 6% after its interim full-year earnings report.
The gains for European stocks comes after they tumbled on Monday, following wild volatility on Wall Street. Investors are now bracing themselves for an update from the U.S. Federal Reserve and remain focused on tensions between the West and Russia over Ukraine.
The Federal Open Market Committee starts its two-day meeting on Tuesday at which it will decide on the next steps for U.S. monetary policy. An interest rate decision is slated for Wednesday at 2 p.m. ET.
Rising inflation is a major concern for the U.S. central bank and investors will listen closely to hear how worried the Fed actually is. Chairman Jerome Powell is due to brief the media after the FOMC releases its statement. The Fed is not expected to begin hiking rates just yet, but the central bank is expected to maintain a path toward tighter policy this year as it fights the highest inflation in decades.
Markets are also nervous that there could be an imminent military conflict between Ukraine and Russia although high-level talks to avert a confrontation are ongoing.
President Joe Biden spoke with European leaders Monday afternoon as the U.S. considers deploying military personnel and equipment to the region as the security situation at Ukraine’s border with Russia deteriorates.
In Asia-Pacific markets overnight, Japan and Hong Kong stocks dropped as much as 2% as regional markets tumbled after a volatile session on Wall Street. U.S. stocks had sold off earlier in the trading session Monday but mounted a dramatic comeback as investors stepped in to buy beaten-up tech shares. U.S. stock index futures fell in early trading Tuesday.
Germany’s Ifo business climate survey showed business morale rose in January to 95.7 from 94.8 in December, slightly ahead of expectations.
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— CNBC’s Weizhen Tan, Abigal Ng and Pippa Stevens contributed to this report.