European markets close slightly higher; H&M up 15% after profit beat; Sweden holds rates

Shares of digital marketing agency S4 Capital slipped 15% before paring losses slightly after warning of a further fall in revenues this year amid a still challenging advertising market.

S4 Capital reported a 25% drop in core earnings in 2023 as tech clients cut ad spend. Shares of the company were trading down around 8% lower at 4:15 p.m. London time.

"Clients are cautious," founder and executive chairman Martin Sorrell told CNBC Wednesday, citing geopolitical and economic uncertainty.

— Karen Gilchrist

The S&P 500 opened higher on Tuesday as it looked to snap a three-day losing streak.

The broader market index rose 0.6%, as did the tech-heavy Nasdaq Composite. The Dow Jones Industrial Average increased 216 points, or 0.6%.

— Lisa Kailai Han

Current economic soft landings are the calm before the storm, according to Ludovic Subran, chief economist at Allianz.

Retail group H&M continued to top gains in late morning trade, up 13% after analysts praised significant beats on operating profit and gross margin in its fiscal first quarter.

"We think H&M has taken various steps to improve its omnichannel offer for customers, which should lead to it broadly holding its own in major markets. But we think H&M is very much in "trading sales for profits" mode which is leading to margin improvement but some pressure on volumes," said Richard Chamberlain, analyst at RBC Capital Markets, in a note.

"As such we think it may have to reinvest sourcing gains at some point to drive volume as it appears to be losing some [like-for-like] share in major markets."

Distribution group Diploma also saw strong gains, up by 11% after announcing the £236 million ($298 million) acquisition of U.S. firm Peerless Aerospace Fastener.

British packaging firm DS Smith meanwhile rose 9% after confirming it is in discussions over a potential sale to U.S.-listed International Paper Company.

— Jenni Reid

The Swedish krona was slightly lower against the euro and U.S. dollar after the Riksbank held its key interest rate at 4%.

The euro-krona exchange rate nearly touched 11.5 for the first time since November 2023 before paring gains, while the U.S. dollar was 0.06% higher at 10.59.

"A dovish statement and downward revision of forecasts indicate the door to the May cut remains wide open," said Bartosz Sawicki, market analyst at Conotoxia, in a note.

"Exactly two years after the start of the tightening cycle, the Riksbank is evidently laying the ground for an imminent easing as price pressures are abating quickly in a recession-struck economy."

— Jenni Reid

France's Renault said it will sell up to 2.5% of Nissan shares to the Japanese automaker, as part of the group's broader strategy to return to an investment grade rating.

The deal could result in a cash inflow of up to 362 million euros ($392 million).

Renault added that the share offload will lead to a capital loss on disposal of up to 450 million euros on the group's accounts, along with a gain of up to 50 million euros for the listed entity.

Nissan said it will be funding its share acquisition with cash, noting the decision is part of its strategy of "enhancing shareholder returns and capital efficiency."

Early last year, the two automakers restructured their decades-long alliance, with Renault reducing its shareholdings in Nissan from around 43% to 15% at the time, as well as transferring 28.4% of its interest in the Japanese carmaker into a French trust.

— Ruxandra Iordache

Sweden's Riksbank held its main interest rate unchanged on Wednesday, as observers keep a watchful eye on which central bank will follow Switzerland in loosening monetary policy in the face of waning inflation.

The decision keeps the Riksbank's key rate at 4%, with the bank's executive board noting "it is likely that the policy rate can be cut in May or June if inflation prospects remain favourable."

Noting "changed pricing behaviour in the corporate sector" and very high increases in consumer prices in recent years, the board stressed it seeks "further confirmation that inflation will stabilise close to the target" at this time.

Last week, the Swiss National Bank unexpectedly lowered its main policy rate by 0.25 percentage points to 1.5%. The Norwegian and U.K. central banks, which issued their rate decisions that same Thursday, refused to blink, leaving their own rates unchanged.

— Ruxandra Iordache

European stocks had a muted open Wednesday, continuing limited movements this week.

The Stoxx 600 index was flat at 8:15 a.m. in London, with major bourses also near the flatline and the U.K.'s FTSE 100 index down 0.15%.

— Jenni Reid

Swedish fashion group H&M on Wednesday posted lower year-on-year net sales of 53.7 billion Swedish krona ($5.069 billion) in the first quarter, while operating profit rose more than expected to 2.08 billion krona.

The company's operating margin rose to 3.9% from 1.3%.

H&M's board will propose a dividend of 6.5 krona per share in its May annual general meeting, and seek authorization for a buyback of its B shares.

"Development continued in the right direction in the first quarter with an improved gross margin and operating profit, lower inventory and strong cash flow," said H&M Group CEO Daniel Ervér, who joined the company at the start of the year after the surprise resignation of Helena Helmersson.

H&M has come under pressure amid growing competition from Zara owner Inditex and Chinese fast fashion retailers such as Shein, and has announced a focus on profitability over sales.

— Jenni Reid

Big U.S. tech companies such as Nvidia, Microsoft and Alphabet have benefited from the artificial intelligence buzz in markets for the past year.

But many smaller firms along the global AI supply chain also stand to benefit.

BofA said in a March 15 note that there's been a "booming" AI market with multiple AI solutions since the second half of 2023.

The bank named various parts of the supply chain that stand to benefit from AI, and its top stocks in each category.

CNBC Pro subscribers can read more here.

— Weizhen Tan

As markets remain volatile amid economic uncertainty, many investors are taking a long-term view and looking to exchange-traded funds (ETFs) to position their portfolios.

CNBC Pro asked several finance experts for their top ETF picks to buy and hold this year. Subscribers can read more about the ETF picks here.

— Ganesh Rao

European markets are set to open higher Thursday.

The U.K.'s FTSE 100 index is expected to open 31 points higher at 7,958, Germany's DAX up 56 points at 18,532, France's CAC 30 points higher at 8,228 and Italy's FTSE MIB up 71 points at 34,273, according to data from IG. 

Earnings will come from Lloyd's of London and JD Sports Fashion is set to issue a trading update. German unemployment data and Italian consumer confidence data for March are due.

— Holly Ellyatt