- Earnings reports push stocks higher
- Eurozone economic activity declines
- French President insists Eurozone defends currency

FTSE-100: 0.22%
Dax-30: 0.38%
Cac-40: 1.10%
FTSE Mibtel 30: 1.12%
Ibex 35: 2.40%
Stoxx 600: 0.49%

European equities recovered Tuesday after a sharp fall a day earlier as a stack of earnings reports beat market estimates.

ARM Holdings was among the big hitters to post strong trading results during the day. Shares in the British chip designer rose 4.65% after it reported a 16% jump in profits before tax and a 19% increase in revenues for the last three months of 2012.

Oil and gas heavyweight BP also exceeded forecasts by analysts in its earnings for the fourth quarter. Earnings adjusted for one-off items and changes in inventory came to $4bn, more than the $3.7bn average estimate. Shares in the UK group climbed 1.68% to 469.80p.

Munich Re jumped 2.51% after the German reinsurance firm said it will increase its dividend for 2012 to €7.0 a share from €6.25 and reported a preliminary net income of €480m, exceeding the €448.3m market estimate.

The results come as the latest data by Markit revealed a deterioration in Eurozone economic activity in January. Even though activity in both the Eurozone's manufacturing and service sectors declined at the slowest rates since last March, the data still came in below the 50 mark which implies a contraction.

The combined final Eurozone composite output index moved up to 48.6, from the initial reading of 48.2 and December's level of 47.2.

Markit chief economist Chris Williamson said "the Eurozone is showing clear signs of healing" but the growth was "heavily skewed" towards Germany.

France experienced the steepest fall as companies in the country noted the biggest downturn for nearly four years with output falling at a much faster rate than in both Spain and Italy.

French President insists Europe defend currency

French President Francois Hollande stressed that the Eurozone should defend an exchange rate policy that protects the single currency from irrational price swings.

"Europe [...] is leaving the euro vulnerable to irrational movements in one direction or the other," Hollande said.

"A monetary zone must have an exchange rate policy or else it ends up subjected to an exchange rate that does not match the true state of its economy."

Economists worry a strong euro in relation to other countries would hurt demand as it makes exports too expensive for Eurozone members.

Euro/dollar edges up

The euro/dollar was up 0.55% to the 1.3588 dollar mark.

Front month Brent crude futures rose by 0.968 dollars to the 116.730 dollar level on the ICE.

RD

Related share prices