On Wednesday, the leading stock indicators of Western Europe show a decrease for the sixth consecutive session. The general pessimism in the world markets provoked investors' concern about further tightening of the monetary policy of the US Federal Reserve in the context of permanently rising inflation. In addition, market participants are closely following the release of corporate earnings reports for the third quarter of 2022 from leading companies in Europe.
Thus, by the time of writing, the composite index of the leading European companies STOXX Europe 600 dipped by 0.4% to 386.39 points.
Meanwhile, the French CAC 40 shed 0.18%, the German DAX shed 0.4% and the UK FTSE 100 shed 0.1%.
Rising and falling leaders
The value of securities of the Dutch manufacturer of consumer goods and medical equipment Royal Philips NV collapsed by 8.4%. The day before, the company's management reported that in the third quarter its same-store sales sank 5% due to serious problems in the logistics of electronic components.
Quotations of the German company Tag Immobilien, operating in the field of real estate, fell by 9.3%.
The market capitalization of French luxury goods maker LVMH Moet Hennessy Louis Vuitton SA increased by 2.2%. The day before, the company published financial statements for the third quarter of 2022, according to which its revenue grew by 27%, significantly exceeding the forecasts of market experts.
The share price of the Danish biopharmaceutical company Chr. Hansen A/S soared 12.7% on strong quarterly results and a positive outlook for the year.
Market sentiment
The focus of the participants of the European stock market on Wednesday - the latest statistics on the countries of the region. Thus, according to the results of August, the volume of industrial production in the eurozone increased by 2.5% in annual terms and by 1.5% in monthly terms. At the same time, experts predicted an annual growth of 1.2%, and a monthly growth of 0.6%.
Meanwhile, according to the UK Office for National Statistics (ONS), in August, the country's gross domestic product (GDP) fell by 0.3% in monthly terms against growth of 0.1% in July. In annual terms, the rise in the GDP of England slowed to 2% from 3.1% in July. The market, on average, did not expect a change in the indicator in the month before last compared to July.
In August, British industrial production sank 1.8% from July after falling 1.1% in June. In annual terms, this indicator lost 5.2% in August compared to a 3.2% decline in July. At the same time, the volume of production in the manufacturing industry decreased by 1.6%, in the mining industry - by 8.2%, and in power generation - by 0.6%.
The month before last, England's trade deficit rose to £7.1 billion from £5.4 billion in July. Imports rose 4.3% m/m to a record £75.3bn, while exports rose 2.2% to £68.2bn.
This week, European traders will be waiting for the release of September statistics on changes in consumer prices in the United States. According to preliminary forecasts of experts, following the results of the past month, annual inflation in America slowed down to 8.1% from 8.3% in August.
Trading results the day before
On Tuesday, European stock indices closed in the red amid a tense geopolitical situation in the world and new warnings about air raids in Ukraine.
As a result, the composite index of the leading European companies STOXX Europe 600 sank by 0.56% to 387.95 points.
Meanwhile, the French CAC 40 shed 0.13%, the German DAX shed 0.43% and the UK FTSE 100 shed 1.06%.
The value of the securities of the Swiss manufacturer of food additives and dyes Givaudan S.A. fell by 6.8%.
Shares of British media company Reach PLC lost 2.6% on news that its CFO Simon Fuller will step down on December 31st.
The market capitalization of the Swiss financial conglomerate Credit Suisse increased by 0.8%, despite the fact that the day before one of the world's largest investment banks Goldman Sachs lowered its price target to 4.7 francs from 5.8 francs.
The share price of the Italian bank Banco Bpm SpA sank 4.9%, while UniCredit lost 2.9%. Meanwhile, Deutsche Bank and Commerzbank fell 3.0%.
The value of securities of the Spanish group, specializing in the design, construction and management of infrastructure facilities, Ferrovial SA rose by 0.5%. On Tuesday, it became known that it had entered into an agreement to sell the British business of Amey Group to the private American company One Equity.
Energy company Echo Energy PLC rose 2%. In the third quarter, the company made tangible progress as part of its plan to increase production and improve infrastructure.
The market capitalization of Danish brewer Carlsberg and Dutch giant Heineken jumped 1.0% and 0.5% respectively.
The price of shares of the British manufacturer of food products and household chemicals Unilever rose by 0.5%.
British tobacco company Imperial Brands gained 0.4% on a share buyback announcement last week.
Norwegian oil and gas company Var Energi ASA plunged 10% after cutting its full-year production forecast due to "operational issues".
The market capitalization of the German chemical company Brenntag SE decreased by 8.7%, energy company Uniper SE - by 6.4%.
The focus of the European market participants on Tuesday was the assessment of the risks of a recession in the global economy amid the prospect of tightening monetary policy by global central banks, primarily the US Federal Reserve.
Earlier this morning, Bank of England officials announced that the central bank had expanded its emergency bond buying program to include inflation-linked government debt. The central bank announced the start of the program on September 28.
So, starting from Tuesday, the British central bank is ready to buy inflation-linked government bonds worth up to 5 billion pounds a day.
In addition, representatives of the central bank warned of "a significant risk to the financial stability of the country" in connection with the crisis unfolding in the UK pension funds.
Meanwhile, according to the latest data from the National Statistical Office (ONS) of the country, in the third quarter of this year, the unemployment rate in England amounted to 3.5% against 3.8% in April-June. At the same time, analysts predicted an indicator at the level of 3.6%.
A tangible boost for European stocks on Tuesday was the announcement that German authorities have shifted their stance in favor of issuing European Union debt to help fund the bloc's response to the gas crisis this winter.
