Shares in Danish shipping giant Maersk sailed higher on Tuesday on a mixed day for European equities, which treaded water amid a sea of earnings reports.
Maersk MAERSK.B, +0.29% stock opened 5% higher, after the world’s largest shipping container line issued a positive trading update after the close on Monday, with the shares settling around 2% higher.
The group’s preliminary earnings for the first quarter of the year show that volumes rose 5.7% compared with the same period last year while average freight rates jumped 35%. Maersk expects to report revenues of $12.4 billion for the quarter with underlying earnings before interest, tax, depreciation, and amortization (Ebitda) of $4 billion.
While analysts said that the results were largely in line with expectations, the group’s upgrade to its full-year guidance was well above consensus. Maersk raised its underlying Ebitda guidance for 2021 to a range of $13 billion to $15 billion after previously projecting $8.5 billion to $10.5 billion.
The Maersk results delivered a boost to European stocks, which were mostly trading around or below flat, with the pan-European Stoxx 600 SXXP, -0.18% just below flat, alongside London’s FTSE 100 UKX, -0.13% and Paris’ CAC 40 PX1, -0.15%. Frankfurt’s DAX DAX, -0.36% fell 0.2%.
Dow futures YM00, +0.03% were pointing up around 30 points, set for a soft but positive open after closing 62 points lower on Monday at 33,981.
“European markets had a rather uneventful start to the week, after last week’s declines, edging slightly higher on what looks set to be a busy few days on the earnings front, which started with [electric-car maker] Tesla’s TSLA, +1.21% numbers after the bell last night,” said Michael Hewson, an analyst at CMC Markets, about European stocks coming out of Monday.
Markets are likely to react to the U.S. Federal Reserve’s closely watched two-day Federal Open Market Committee meeting for April, which gets under way on Tuesday. The meeting, which culminates in a press conference on Wednesday, will give investors a sense of the central bank’s latest position on inflation and monetary policy.
“In spite of the strong finish for U.S. markets yesterday and a subdued Asia session, today’s European open looks set to be another subdued one as the latest Federal Reserve meeting gets under way, with little expectation of any distinct change of tone from what we saw in March,” Hewson added.
European stocks making big moves on Tuesday were largely tied to earnings results.
Shares in BP BP, +0.91% rose more than 1%, as the oil major committed to rewarding investors with a $500 million share buyback program after meeting debt reduction targets. Profits in the first quarter of 2021 also firmly beat analyst expectations, with underlying net profit on a replacement cost basis — the measure most closely watched by analysts — coming in at $2.6 billion, ahead of the $1.5 billion consensus.
Banking giant HSBC’s HSBA, +1.62% shares ticked up near 2%, after the group’s net income for the first quarter of $3.9 billion beat the analyst consensus by more than $1 billion. The group said that profit before tax in the quarter was 79% higher than in the same period in 2020.
UBS UBS, +0.33% was another financial heavyweight to report, but the results sent the stock down more than 2%. The Swiss bank reported strong earnings for the first quarter of 2021, with profit before tax up 14% from the year prior, but the results were marred by a surprise loss related to the meltdown of hedge fund Archegos Capital. UBS said that it would take a $774 million hit from the fire sale linked to Archegos.