French Stocks Fall Amid Earnings Reports

The FTSE MIB declined to around 36,450 in early trading on Wednesday, reversing a more than 1% gain from the previous session and moving in line with its regional peers.

Traders kept a close eye on US trade policy during Donald Trump's presidency while also assessing new economic data and more corporate earnings.

HCOB data showed that growth in Italy's services sector slightly slowed, while the private sector remained in contraction.

Among individual stocks, the top laggards were Ferrari and Prysmian, both shedding over 2%.

Assicurazioni Generali, STMicroelectronics, Unipol Gruppo, and Nexi each lost more than 1%.

Meanwhile, Banca Generali was the top performer, rising over 2% ahead of its Q4 earnings report this week.

The DAX fell about 0.5% to around 21,400 on Wednesday, in line with most of its regional peers, following a slight rise in the prior session.

Traders continued the US trade policy while also assessing new economic data and fresh corporate earnings from both sides of the Atlantic.

The Hang Seng Index slipped 193 points or 0.9% to finish at 20,597 on Wednesday, giving up some gains from the prior day as US futures dropped markedly after Google-parent Alphabet reported a revenue miss.

Markets backed away from their near two-month highs, tracking a decline in mainland markets as trading resumed from a Spring Festival break amid a mounting trade row between China and the US. Meanwhile, the White House said that a call between President Trump and Chinese leader Xi Jinping had yet to be scheduled, adding to market uncertainty.

In other news, US Postal Services temporarily suspended inbound packages from China and Hong Kong "until further notice." Turning to fresh data, the Caixin Services PMI hit a 4-month low in January, in line with official data released last week.

Still, the index pared its early losses, on enthusiasm around China's AI company DeepSeek.

Some decliners included Nongfu Spring (-6.9%), Trip.com(-6.4%), Li Auto (-4.0%), and Galaxy Ent. (-3.7%).

Japan's services industries expanded in January, and boosted hiring to handle additional business, reported S&P Global on Wednesday.

The Japan services purchasing managers index (PMI) rose to 53.0 in January, up from 50.9 in December 2024, and rising further above the 50-marker that separates growth from contraction, reported S&P Global, citing its monthly survey.

The survey covers the consumer (excluding retail), transport, information, communication, finance, insurance, real estate and business services sectors.

"Rising services business activity has now been recorded in each of the last three months (including January)," said S&P Global. "Sub-sector data indicated that the strongest growth was in transport and storage and finance and insurance."

Facing rising demand, managers were hiring in January. "Service providers increased staffing levels again in the latest

survey period, extending the current run of job creation to 16

months," noted S&P Global.

Japan's service sector managers became more optimistic in the first month of the year. "Concurrently, business optimism remained elevated in January, and the degree of confidence ticked higher from that in December," advised S&P Global.

However, Japan's service sector reported experiencing higher costs and raised prices in January. "Input price inflation strengthened since the end of 2024, and was the most pronounced since last August. Firms linked higher costs to rising wages, as well as increasing fuel and raw material prices," said S&P Global. "Latest data also signaled a sharp increase in average prices charged at the start of 2025."

The Japan services PMI was compiled by S&P Global from surveys sent to 400 service sector companies from January 9 through January 25.

In addition, the Japan composite PMI, a combination of the services and manufacturing sectors, rose to 51.1 in January, up from 50.5 in December and above the neutral marker for the third consecutive month, reported S&P Global.

European equity markets traded lower on Wednesday, with the Stoxx 50 falling 0.3%, as investors braced for more earnings reports.

Companies such as Banco Santander, Credit Agricole, GSK, Handelsbanken, and TotalEnergies, among others, are set to release their results today.

In corporate news, Novo Nordisk posted stronger-than-expected profits for the fourth quarter, driven by a 107% surge in sales of its Wegovy weight loss drug.

Meanwhile, investors continued to monitor rising global trade tensions, although the measures implemented by the US and China have so far been less severe than feared by the market.

The dollar continues to trade at softer levels after Tuesday's data showed U.S. job openings fell in December. Openings dropped to 7.6 million from 8.2 million in November. The data hints at less pressure on wage growth and potentially more supportive Federal Reserve policy, Swissquote Bank analyst Ipek Ozkardeskaya says in a note. Traders will now turn their focus to U.S. ADP private payrolls data at 1315 GMT and the U.S. ISM services report at 1500 GMT. The DXY dollar index falls 0.2% to a near one-week low of 107.643.(renae.dyer@wsj.com)