German stocks lift European markets on brink of debt reform decision; Eyes on Trump-Putin call

Saudi Arabian state oil giant Saudi Aramco saw its shares slide Tuesday, continuing a steady decline following the company’s latest earnings release that revealed it was slashing its dividend.

Aramco shares were trading at 25.6 riyals per share at 2:00 p.m. in Riyadh, down 1.5% on the previous day’s close. The shares are down 7.25% in the last month — with a distinct drop beginning on March 4, when the company published the dividend news — and are about 50% below their all-time high set in 2022. The decision to cut its dividend was based on lower oil prices and production levels.

The oil producer said in its earnings release that it expects total dividends for 2025 of $85.4 billion — a significant fall from 2024′s total of $124.2 billion.

— Natasha Turak

The British pound hit a four-month high on Tuesday morning, breaching $1.3 at 10 a.m. in London, before retreating.

The British pound last reached $1.3 in November last year. It was down less than a percentage point against the greenback at 12:25 p.m., at $1.29.

The Bank of England is expected to hold interest rates steady at its meeting on Thursday, as it deals with the impact of U.S. President Donald Trump’s trade war and economic uncertainty.

The U.K.’s Office for Budget Responsibility is also set to publish its economic forecast on March 26, during which Chancellor Rachel Reeves will make her Spring Statement on the economy.

— Sawdah Bhaimiya

Shares of Novo Nordisk rose 3.7% after the famed obesity drug maker had its membership of a U.K. pharmaceutical industry body restored following a two-year suspension for breaching a national drugmakers practice code.

The Danish pharmaceutical firm was suspended by the Association of the British Pharmaceutical Industry (ABPI) in 2023 for not fully explaining its involvement in training on obesity drugs that it shared with pharmacists on LinkedIn.

The ABPI said in a statement Monday that it was confident the company has made “clear, significant, and sustained improvements” to ensure it adheres to its standards and code of practice.

— Karen Gilchrist

The yield on German 10-year government bonds — known as bunds — could hit 4% within three years, BNP Paribas said on Tuesday.

German lawmakers are set to vote on reforming the country’s so-called debt brake rule on Tuesday to permit additional national spending on defense.

According to news agency Reuters, BNP Paribas’s head of rates, FX and strategy, Sam Lynton-Brown, said in a media call that 10-year bund yields would likely trade between 2.5% and 3% in the near term, then rise with time as Germany issues more bonds to fund additional defense spending.

The yield on 10-year bunds was trading at 2.845% on Tuesday morning, after gaining 4 basis points by 10:19 a.m. London time. A rise of 4% would put the 10-year yield at its highest level since the 2008 financial crisis.

— Chloe Taylor

The euro was 0.2% higher against the U.S. dollar at 9:30 a.m. in London, trading at around $1.0942.

It put the European currency on track for its third consecutive day of gains against the greenback.

— Chloe Taylor

Shares of British technology services firm Computacenter surged to the top of the Stoxx 600 on Tuesday, gaining 11.1% by 9:16 a.m. in London.

It came after the company reported an 11.5% year-on-year drop in annual operating profit, but noted the second half of 2024 had seen “improved momentum.” The company cited a record year in the North American market, but said that softer U.K. market conditions and increased company-wide investment had also influenced its full-year earnings.

The firm said it expects to make progress in 2025, after beginning the year “with a committed product order backlog which is significantly ahead of our position in December 2023.”

— Chloe Taylor

Frankfurt’s DAX index, home to Germany’s biggest companies, had gained 0.9% by 8:53 a.m. in London.

Continental, Infineon and BMW rose to the top of the DAX after gaining 3.6%, 3% and 2.9%, respectively.

Meanwhile, the MDAX index, which houses 50 German mid-cap firms, jumped 1.7% higher on Tuesday morning. Its top movers included Thyssenkrupp, up 7%, Hensoldt, which gained 5.9%, and Delivery Hero, which was 4.8% higher.

The rally came as German lawmakers prepare for a crucial vote on whether to reform the country’s so-called debt brake system to allow more public borrowing and hike defense spending.

— Chloe Taylor

Shares of Volkswagen were 1.2% higher after the open on Tuesday.

That came after Audi, one of the autos group’s subsidiaries, said Monday it would cut 7,500 jobs in Germany.

The move brings the total number of layoffs planned across the Volkswagen Group to almost 48,000, according to news agency Reuters.

— Chloe Taylor

In its latest scenario analysis, the Swiss National Bank considered a “substantial” loss potential for Swiss banking giant UBS, which completed its takeover of embattled domestic rival Credit Suisse in June 2023 after the latter’s tumultuous collapse.

Since then, Swiss regulators have raised concerns over UBS reaching “too big to fail” status and the risks that its potential downfall at any point could pose to the national economy.

“Integration costs and expected losses associated with the winding down of Credit Suisse’s legacy positions are currently impairing UBS’s loss-absorbing capacity,” the SNB said in its annual 2024 report out on Tuesday, stressing this is a “natural consequence of integrating and de-risking a bank with lower financial strength. At the same time, the planned wind-down of legacy positions should reduce UBS’s risk exposures and associated costs in the future.”

The Swiss lender further noted that UBS’ parent bank, UBS AG, has “current weaknesses in the capital backing of its participations in subsidiaries” but an overall stronger capital position than did Credit Suisse.

Nevertheless, “weaknesses in the current capital regime need to be addressed,” according to the SNB.

Questions have risen as to whether UBS will face increases in its capital requirements under new Swiss banking regulations that are being reformed.

— Ruxandra Iordache

European markets are expected to open higher on Tuesday.

The U.K.’s FTSE 100 index is expected to open 18 points higher at 8,696, Germany’s DAX up 90 points at 23,207, France’s CAC 21 points higher at 8,091 and Italy’s FTSE MIB 101 points higher at 39,098, according to data from IG. 

Earnings come from Travis Perkins and Eni, while data releases include the ZEW economic sentiment indexes for Germany and Europe.

— Holly Ellyatt