Russia-Ukraine fears subside; earnings in focus

LONDON – European markets inched higher on Wednesday as investors assessed the geopolitical outlook following Russia’s partial withdrawal from the Ukrainian border, while corporate earnings season rumbles on.

The pan-European Stoxx 600 index gained 0.5% in early deals, with basic resources climbing 1.3% to lead gains while telecoms slid 0.5%.

Markets around the world rallied on Tuesday after Russia announced that it had begun returning some troops to deployment bases after training exercises near the Ukrainian border, assuaging fears of an imminent invasion and raising hopes of a de-escalation of recent tensions with the West.

However, Western officials and Ukrainian President Volodymyr Zelenskyy have urged bail in taking Russia̵[ads1]7;s claims at face value.

Shares in Asia-Pacific, which had closed by the time the news broke on Tuesday, joined their US and European counterparts in rallying on Wednesday, with Japan’s Nikkei 225 leading gains.

US stock futures were slightly lower in early premarket trade on Wednesday after the major indexes snapped a three-day losing street in regular trading on the back of the news of Russia’s partial withdrawal.

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Earnings remain a key driver of individual share price action in Europe, with Heineken, Ahold Delhaize, Air Liquide, MTU Aero Engines and Alcon among the companies reporting before the bell on Wednesday.

French lottery company FDJ climbed more than 6% to lead the Stoxx 600 in early trade after posting strong full-year earnings and upping its forward guidance.

At the bottom of the European blue chip index, Swedish IVF company Vitrolife fell more than 9% after reporting a fall in fourth-quarter net income.

Ericsson shares fell 6.5% after the Swedish telecoms giant announced that an internal investigation had found serious compliance breaches at its business in Iraq.

On the data front, UK inflation came in at an annual 5.5% in January, slightly ahead of forecasts and remaining at a 30-year high.

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