European markets start February with positive momentum; Stoxx 600 up 1%

LONDON — European stocks advanced on Tuesday as markets kicked off a new month of trading.

The pan-European Stoxx 600 climbed 1.2% by early afternoon, with basic resources adding 2.7% to lead gains as almost all sectors and major bourses traded om positive territory.

UBS on Tuesday reported a fall in quarterly profit, but beat analyst expectations and set ambitious new profitability targets as part of a strategic update. UBS shares climbed 7% by early afternoon deals.

The Swiss bank posted net profit attributable to shareholders of $1.35 billion for the fourth quarter, but the bottom line was hit by an increase of $740 million in litigation provisions for a French cross-border tax case.

The only stronger performer on the Stoxx 600 was Swedish investment company Storskogen Group, which gained 8%.

At the bottom of the European blue chip index, Swiss online pharmacy Zur Rose Group fell 5.5%.

European markets had a spring in their step during the first trading session of February after a positive end to January trade on Monday. Nonetheless, the pan-European Stoxx 600 index is on pace for its worst month since October 2020, as investors reassess their allocations amid fears over higher interest rates.

Euro zone growth is a cause for concern too, after preliminary gross domestic product (GDP) data released on Monday showed economic output slowed in the fourth quarter of 2021, with GDP rising 0.3% quarter-on-quarter for a 4.6% annual gain.

Over on Wall Street, stocks surged for a second day Monday to wrap up a rough January in which investors grappled with the Federal Reserve’s policy shift. But U.S. stock futures declined in overnight trading. Asia-Pacific markets rose on Tuesday.

On the data front in Europe, French inflation eased from a 13-year high in January, INSEE statistics agency said Tuesday. Annual inflation came in at 3.3%, down from 3.4% in December and above an average forecast of 3.0%.

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