Europe markets rise as tech stocks rally; ASML gains 11%

Swedish truck maker Volvo Group on Wednesday reported weaker-than-expected fourth-quarter operating profit but posted a significant upswing in order intake.

Adjusted operating profit for the final three months of the year came in at 14.04 billion Swedish krona ($1.28 billion), down from 16.98 billion krona in the same period a year earlier. The print was also below an analyst forecast of 14.51 billion, Reuters reported, citing data compiled by LSEG.

Volvo Group’s fourth-quarter net order intake increased by 24% to 61,200 vehicles, primarily driven by larger fleets in eastern Europe and demand for vocational trucks in the U.S.

Shares of the company rose 3.5% on the news, hitting a new 52-week high.

— Sam Meredith

Spain’s gross domestic product rose 0.8% in the fourth quarter of 2024 from the previous quarter, the country’s statistics office INE said Wednesday.

This was more than the 0.6% forecast by analysts polled by Reuters, and was the same pace as that seen in the previous quarter.

INE on Wednesday also said that it was estimating 3.2% GDP growth for the full year 2024. Spain has become somewhat of an outlier in Europe as economic growth among other major economies in the region, such as Germany, has been more sluggish.

The Spanish data comes ahead of several other key GDP releases from across Europe that are due throughout the week, including the economic growth figures for the euro area which are due Thursday.

— Sophie Kiderlin

Shares of luxury goods giant LVMH dropped almost 5% on Wednesday as investors reacted cautiously to the group’s slightly better-than-expected full-year results.

The owner of brands including Louis Vuitton, Moët & Chandon and Hennessy posted revenues of 84.68 billion euros ($88.27 billion) for 2024, exceeding the 84.38 billion euros forecast by LSEG analysts and equating to organic growth of 1% versus the previous year.

Shares were down 4.8% by 8:10 a.m. London time.

Investors have been looking for further confirmation of a recovery in the luxury sector after Cartier owner Richemont earlier this month reported its “highest ever” quarterly sales figure over the festive shopping period.

However, declining sales in LVMH’s critical fashion and leather goods and wines and spirits segments pointed to continued pressure within the group.

— Karen Gilchrist

Dutch semiconductor giant ASML on Wednesday reported a big jump in fourth-quarter net bookings, suggesting strong demand for its advanced chipmaking tools even as DeepSeek’s low-cost model raises concerns over AI spending.

Here’s how ASML did versus LSEG consensus estimates for the fourth quarter:

• Net sales: 9.26 billion euros versus 9.07 billion euros expected.
• Net profit: 2.69 billion euros versus 2.64 billion euros expected.

Read the full story here.

— Ryan Browne

Broad stock market indexes would suffer in 2025 if Big Tech leaders continue to falter but the average stock is likely to “hold up well,” according to Capital Economics senior markets economist James Reilly.

Although the S&P 500 Information Technology Index slid 5.5% Monday, its largest one-day decline since 2020, “the losses were largely confined to firms that had been expected to play a key role in facilitating AI, including semiconductor firms and utilities firms powering data centers,” London-based Capital Economics said, noting the S&P 500 only fell 1.5% and roughly 70% of companies in the index rose.

One possibility is that investors will start to favor more of the users of artificial intelligence and fewer of the “enablers,” which may have already begun before Monday, Reilly wrote. “In this scenario, the S&P 500 could rally further even as sentiment towards these prior favorites cooled. Indeed, something similar happened during the dotcom bubble — there was a rotation within the I.T. sector (from the largest firms) around 1999/2000 that didn’t undermine the S&P 500 index.”

Strangely, the large share of the market accounted for by the 10 biggest stocks offers some hope. “That might mean that the losses as these gains unwound would be similarly concentrated, affording plenty of scope for the average firm in the S&P 500 to do well if the economic backdrop stayed positive, as we expect,” Reilly noted.

— Scott Schnipper

European markets are expected to open in mixed territory Wednesday.

The U.K.’s FTSE 100 index is expected to open 1 point higher at 8,538, Germany’s DAX up 46 points at 21,490, France’s CAC down 16 points at 7,897 and Italy’s FTSE MIB up 74 points at 36,406, according to data from IG.

Earnings come from ASML, Volvo, WH Smith and AkzoNobel and Sweden’s Riksbank publishes its latest monetary policy decision later this morning.

— Holly Ellyatt