Europe Markets

Europe markets close higher despite Fed jitters; Deutsche Bank up 4% on earnings

Key Points
  • Global markets are reacting to the Federal Reserve's indication on that it could raise interest rates as early as March.
  • Investors were comforted by fresh economic data showing U.S. fourth-quarter GDP jumped 6.9% from the year prior.
  • Deutsche Bank climbed 4.4% after defying market expectations to post a profit for the fourth quarter of 2021.

LONDON — European stocks closed higher after a choppy trading session Thursday, as global markets reacted to the latest policy decision from the U.S. Federal Reserve.


The pan-European Stoxx 600 closed up by 0.7%, clawing back from earlier losses as U.S. GDP data came in better than expected. Utilities were the top performers, climbing 2%, while travel shares sank 1.6%.

Global markets are reacting to the Federal Reserve's indication on Wednesday that it could soon raise interest rates for the first time in more than three years.

The Fed's policymaking group said a quarter-percentage point increase to its benchmark short-term borrowing rate is likely forthcoming. It would be the first increase since December 2018.

The post-meeting statement from the Federal Open Market Committee did not provide a specific time for when the increase will come, though indications are that it could happen as soon as the March meeting.  The statement comes in response to inflation running at its hottest level in nearly 40 years.

On Wall Street, stocks rose as investors digested fresh economic data showing U.S. fourth-quarter gross domestic product jumped 6.9% from the year prior. Economists surveyed by Dow Jones had expected year-on-year GDP growth of 5.5% in the period.

Back in Europe, earnings news was a key driver of individual share price movement Thursday.

Toward the top of the Stoxx 600, Deutsche Bank climbed 4.4% after defying market expectations to post a profit for the fourth quarter of 2021, as investment bank revenues rose.

The German lender said profit attributable to shareholders came in at 145 million euros ($162.7 million) for the final three months of the year — a sixth consecutive quarter of profit and almost triple its profit for the same period in 2020.

On the other end of the European blue chip index, British boot brand Dr. Martens fell 9% after its quarterly earnings report.

Along with Deutsche Bank, earnings in Europe on Thursday came from Unicredit, LVMH, SAP, Banco Sabadell, easyJet, Diageo and STMicroelectronics. Renault provided a strategic update on the Nissan/Mitsubishi alliance.

In corporate news, Dutch file-sharing service WeTransfer scrapped plans to go public on the Euronext Amsterdam exchange, citing "volatile market conditions."

On the data front, Germany's GfK consumer sentiment index came in at -6.7 points heading into February from a revised -6.9 points a month ago, exceeding average analyst expectations for a drop to -7.8.

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— CNBC's Ryan Browne, Jeff Cox, Tanaya Macheel and Abigail Ng contributed reporting to this market report.