European markets head into February with positive momentum

LONDON — European stocks are expected to open higher on Tuesday as markets kick off a new month of trading.

The U.K.'s FTSE index is seen opening 45 points higher at 7,495, Germany's DAX 113 points higher at 15,518, France's CAC 40 up 65 points at 7,034 and Italy's FTSE MIB 154 points higher at 26,922, according to data from IG.

European markets look poised to start the first trading session of February with a spring in their step after a positive end to January trade on Monday. Nonetheless, the pan-European Stoxx 600 index is on pace for its worst month since October 2020, as investors reassess their allocations amid fears over higher interest rates.

Euro zone growth is a cause for concern too, after preliminary gross domestic product (GDP) data released on Monday showed economic output slowed in the fourth quarter of 2021, with GDP rising 0.3% quarter-on-quarter for a 4.6% annual gain.

Over on Wall Street, stocks surged for a second day Monday to wrap up a rough January in which investors grappled with the Federal Reserve's policy shift. But U.S. stock futures declined in overnight trading. Asia-Pacific markets rose on Tuesday, with investors in the region looking ahead to India's budget announcement.

Earnings come from UBS on Tuesday and data releases include France's preliminary inflation figures for January and the euro zone's unemployment rate for December.