Fed’s quarter-point rate hike reaction

Telecom Italia shot to the top of European stocks in early trade, rising 11% following reports U.S. private equity firm KKR & Co Inc was preparing to make a nonbinding offer for its fixed-line network.

The network provides key support to the struggling company’s massive debt load, Reuters reported.

Meanwhile, Electrolux dropped 8.5% after warning it would see lower sales this year and may suffer on higher energy and labor costs.

— Jenni Reid

Europe’s Stoxx 600 was 0.5% higher at the open as investors prepared for interest rate hike decisions from the Bank of England and the European Central Bank this afternoon.

That follows declines in the last three sessions. After the European close Wednesday, the U.S. Federal Reserve announced a smaller 25 basis point rate increase — but gave few hints its hiking cycle was coming to an end.

Germany’s DAX climbed 0.65%, France’s CAC 40 was up 0.6% and the U.K.’s FTSE 100 was up 0.2%.

Deutsche Bank reported its 10th straight quarter of profit, receiving a boost from higher interest rates and favorable market conditions.

The German lender reported a 1.8 billion euro ($1.98 billion) net profit attributable to shareholders for the fourth quarter, bringing its annual net income for 2022 to 5 billion euros, a 159% increase from the previous year.

It almost doubled a consensus estimate among analysts polled by Reuters of 910.93 million euro net profit for the fourth quarter, and exceeded a projection of 4.29 billion euros on the year.

Read the full story here.

JPMorgan has named five stocks to own amid an expected rise in the broader Chinese stock market in February.

Strategists at the Wall Street bank attributed last week’s sell-off in Hong Kong-listed shares as profit-taking by some investors.

They said the wider stock market will be “grinding higher” this month but rotate into “quality laggards in consumption as well as value cyclical and growth spaces.”

CNBC Pro subscribers can read more about the 5 stocks JPMorgan has named.

— Ganesh Rao

Forget growth stocks like tech. Analysts are recommending that investors go for companies with lots of cash.

The market rallied in January — including the tech-heavy Nasdaq Composite, which rose nearly 10.7% last month for its best monthly performance since July.

But analysts say companies with pricing power are a safer bet than tech, given that inflation is expected to stay high this year and the uncertainty around when the U.S. Federal Reserve will pivot to lower interest rates.

They named three stocks to buy.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Shares in Alibaba have enjoyed a strong rebound this year, though a recent slump in its share price has got some investors worried.

But the Wall Street favorite is far from the only game in town, with several stocks also offering exposure to the Chinese Internet sector.

Pro subscribers can read more here.

— Zavier Ong

European markets are heading for a higher open Thursday as markets react positively to the U.S. Federal Reserve’s quarter-point rate hike.

The U.K.’s FTSE 100 index is expected to open 31 points higher at 7,788, Germany’s DAX 101 points higher at 15,273, France’s CAC up 35 points at 7,109 and Italy’s FTSE MIB up 121 points at 26,870, according to data from IG.

On Thursday, investors in Europe will be focused on the latest monetary policy decisions from the European Central Bank and Bank of England.

It’s a busy day for earnings with Shell, BT Group, Deutsche Bank, Banco Santander, ABB, Julius Baer and Roche reporting.

— Holly Ellyatt