European Stocks Higher; Stellar Results From Vodafone, Diageo Help

European stock markets edged higher Tuesday, boosted by strong results from corporate giants Vodafone (NASDAQ:VOD) and Diageo (LON:DGE) and supported by positive mood music from a meeting between U.S. President Joe Biden and Chinese leader Xi Jinping.

At 3:25 AM ET (0825 GMT), the DAX in Germany traded 0.2% higher, the CAC 40 in France rose 0.2% and the U.K.’s FTSE 100 climbed 0.1%.

The major equity indices in Europe received a largely positive handover from Asia, with the Hang Seng index in Hong Kong up over 1%, as the leaders of the U.S. and China met virtually in the closest communication between the two countries’ leaders since Biden took office in January.

Also helping the mood was positive quarterly news from Vodafone, with the mobile group raising its forecast for this year’s free cash flow after a strong first half, driven by a good performance in Germany, its largest market. Its stock jumped 4.8%.

Diageo stock rose 2.4% after the world’s largest spirits maker forecast stronger sales growth for 2023-2025 of between 5% and 7%, compared with the 4% to 6% growth during 2017-2019.

Imperial Brands (OTC:IMBBY) stock rose 1.5% after the tobacco group reported a slight uptick in its full-year sales, aided by higher cigarette prices that more than offset a decline in volumes.

Still, any gains are likely to be limited in Europe Tuesday as the continent again starts to restrict activity to bring the seasonal rise in Covid-19 cases under control. Additionally, tensions are mounting in Ukraine, with the U.S. warning that Russia is massing troops at the border and NATO stating it would be prepared to support the sovereignty of the country.

On the data front, the U.K employment rate fell to 4.3% in September, from 4.5% the month before, while the October claimant count dropped almost 15,000, a sign that the end of the government’s furlough scheme has not led to any dramatic deterioration in the labor market.

Later in the session sees the release of third-quarter employment and GDP readings for the Eurozone.

Crude prices rebounded Tuesday after recent losses, with attention likely to focus Tuesday on the release of U.S. crude oil data from the American Petroleum Institute later in the day.

By 3:25 AM ET, U.S. crude futures traded 0.9% higher at $80.49 a barrel, while the Brent contract rose 1.1% to $82.91. Both contracts dropped last week on the whole, for the third week in a row.

Additionally, gold futures edged 0.1% higher to $1,868.25/oz, while EUR/USD traded 0.1% higher at 1.1375.

European Stocks Higher; Stellar Results From Vodafone, Diageo Help