European stocks wrapped up trading on a slightly lower note this Friday, with investors digesting recent earnings reports and evaluating growth forecasts in light of fresh economic data. Concerns persisted over Middle Eastern tensions and the looming uncertainty of the forthcoming U.S. presidential election, which exerted slight pressure on the markets.
In a significant move, Russia's central bank raised its main interest rate by an unexpected 200 basis points, signaling the possibility of another increase next month. This decision was in response to rising inflation expectations and additional fiscal spending amplifying pro-inflationary pressures. The central board, under the leadership of Governor Elvira Nabiullina, elevated the benchmark rate to 21%, up from 19%.
The pan-European Stoxx 600 slipped by 0.03%. The FTSE 100 in the U.K. decreased by 0.25%, France’s CAC 40 declined by 0.08%, while Germany’s DAX rose slightly by 0.11%. Switzerland’s SMI edged up by 0.09%.
Amongst other European markets, Denmark, Greece, Ireland, Russia, and Spain saw declines. Conversely, indices in Austria, Belgium, Finland, Netherlands, Norway, Portugal, Sweden, and Turkey closed the day higher. Iceland and Poland remained steady.
In the U.K. market, shares of Lloyds Banking Group plummeted over 7%, while Airtel Africa saw a 5.7% drop following a notable decrease in semi-annual profits. Stocks of Smith & Nephew, Barclays Group, Aviva, Melrose Industries, Barratt Developments, RightMove, Fresnillo, Entain, Intertek Group, and Tesco fell between 1% and 3%.
Natwest Group recorded a modest rise due to stronger-than-predicted earnings and an upward revision in future earnings guidance. Meanwhile, Mondi advanced by 2.3%, and Anglo American Plc, Rio Tinto, Scottish Mortgage, Glencore, Next, Schroders, and Pershing Square Holdings increased between 1% and 2%.
In Germany, Rheinmetall dropped by 3.25% and Sartorius fell 2%. Fresenius Medical Care, Continental, Beiersdorf, E.ON, MTU Aero Engines, and Munich RE saw declines ranging from 1% to 1.4%. However, Puma, Daimler Truck Holding, and Siemens Energy gained 5%, 4.5%, and 3.7%, respectively, while HeidelbergCement rose by 2.2%, and Zalando, Porsche, and Symrise climbed between 1.3% and 1.75%.
In France, Vinci fell by 3.4% following warnings of potential French tax measures that could impact profits. Capgemini, Dassault Systemes, Accor, Edenred, Orange, Bouygues, Pernod Ricard, and AXA also declined between 1% and 3%. Meanwhile, Sanofi rallied over 2.5% after announcing better-than-expected third-quarter earnings. Renault climbed more than 2%, and ArcelorMittal, Hermès International, Vivendi, Stellantis, Schneider Electric, Safran, and STMicroelectronics also ended the day on a positive note.
On the economic data front, INSEE reported that French consumer confidence decreased slightly in October for the first time in six months, dropping to 94 from 95, aligning with expectations, yet remaining below the long-term average of 100. In Germany, business confidence improved slightly in October, marking its first increase in five months, as reported by the ifo Institute. The business climate index rose to 86.5 from 85.4, exceeding the anticipated 85.6.
Additionally, a report from the European Central Bank highlighted a moderate improvement in Eurozone bank lending growth in September, coinciding with easing interest rates. Adjusted loans to the private sector rose by 1.6%, compared to 1.5% in August. Claims on the private sector showed a consistent annual growth rate of 1.2% in September.
