Investing.com - European stock markets edged higher Wednesday, boosted by strong gains from German sportswear giant Adidas (OTC:ADDYY), overshadowing worries over future trade tariffs from the new Trump administration.
At 07:05 ET (12:05 GMT), the DAX index in Germany climbed 1.3%, rising to a record peak, while the CAC 40 in France gained 1% and the FTSE 100 in the UK surged 0.3%.
Adidas soars on strong sales
The German market outperformed Wednesday, after Adidas (ETR:ADSGN) stock jumped over 6% in the wake of the German sportswear giant reporting better-than-expected preliminary fourth-quarter results, with strong sales and profitability for the important holiday shopping period.
Novo Nordisk (CSE:NOVOb) stock climbed over 2% after the Danish drugmaker announced it has initiated clinical trials for two new weight-loss drugs.
On the flip side, easyJet (LON:EZJ) stock fell over 3%, overturning earlier gains, after the low-cost carrier flagged weaker revenue expectations for the second quarter, even as it reported a smaller operating loss in its first quarter and kept its profit guidance for the year on easing fuel costs and strong passenger demand.
Barry Callebaut (SIX:BARN) stock dropped over 6% after the Swiss chocolate maker reported a lower sales volume than expected for its first quarter, hit by delayed orders amidst record high cocoa prices.
The tech sector was also in the spotlight following the announcement that OpenAI, SoftBank (TYO:9984) and Oracle (NYSE:ORCL) will form a venture to invest $500 billion in AI infrastructure across the US, and after streaming giant Netflix (NASDAQ:NFLX) reported a record gain in subscribers last quarter.
Trade war worries exist
Donald Trump was inaugurated as the next US president on Monday, returning to the White House after a gap of four years, and he has repeated his threat to impose tariffs on EU goods entering the States.
He also said his administration was discussing imposing an additional 10% tariff on goods imported from China, starting in February.
Europe will respond to any US tariffs in a proportionate way, the European Union’s commissioner for the economy, Valdis Dombrovskis said Wednesday.
“If there is a need to defend our economic interests we will respond in a proportionate way,” Dombrovskis said in an interview with CNBC at the World Economic Forum in Davos, Switzerland.
Lagarde hints at rate cuts in Davos
There are no major data releases in Europe Wednesday, and the focus has remained on Davos as investors look for clues from European Central Bank officials over the path of interest rates.
The central bank is widely expected to lower its policy interest rate by 25 basis points next week, the first cut of what is likely to be at least four this year as the region suffers from growth headwinds.
"The direction is very clear," ECB President Christine Lagarde told CNBC in Davos about interest rates. "The pace we shall see depends on data, but gradual move is certainly something that comes to mind at the moment."
Crude bounces
Oil prices edged higher Wednesday, rebounding from the previous session’s losses on the back of President Trump’s declaration of a national emergency to ramp up energy production.
By 07:05 ET, the US crude futures (WTI) climbed 0.3% to $76.09 a barrel, while the Brent contract rose 0.3% to $79.56 a barrel.
The benchmarks retreated on Tuesday after Trump laid out his plan to maximise oil and gas production, including by declaring a national energy emergency to help the rolling back environmental protections, and withdrawing the US from the Paris climate pact.