On Thursday, the leading stock indicators of Western Europe showed different directions amid the negative dynamics of the stock market of the United States and Asia. In addition, market participants are closely monitoring the release of corporate earnings reports for the third quarter of 2022 from key companies in Europe.
So, at the time of writing, the composite index of the leading European companies STOXX Europe 600 sank by 0.5% to 383.94 points.
Meanwhile, the French CAC 40 was down 0.23%, the German DAX was up 0.13% and the UK FTSE 100 was down 0.54%.
Rising and falling leaders
The value of securities of the Swedish energy company Orron Energy AB soared by 10%.
Swedish architecture firm Sweco AB plunged 6.7%.
The market capitalization of the British carrier EasyJet PLC decreased by 0.8%. The day before, the company's management announced that it expects to receive a pre-tax loss in the amount of $ 188.7-210.9 million for the 2022 financial year ended September 30. This state of affairs could lead the air carrier to a third annual loss in a row.
The share price of the Italian bank Banca Monte dei Paschi di Siena SpA sank 13.6% on the announcement of the company's management about the intention to strengthen the balance sheet through the implementation of a plan to raise up to 2.5 billion euros.
British recruitment firm Hays plunged 0.6% on a report of a slowdown in hiring activity in the UK and the United States.
Quotes of the British construction company Taylor Wimpey fell by 4.3%.
The market capitalization of the British gambling company Entain increased by 1.5%. The day before, the company's management said that the World Cup, which starts in November, will help boost online gaming revenue in the fourth quarter.
Market sentiment
The focus of European stock market participants on Thursday is the expectation 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.
Investors are concerned about the prospects for further tightening of the US Federal Reserve's monetary policy at the November meeting in the face of constantly rising inflation. Despite the fact that by the end of September the level of consumer prices in the country may slow down, it will still remain at a high level, which may push the US central bank to another increase in the discount rate. The market forecasts a November increase of 0.75 percentage points.
Recall that following the results of a two-day September meeting, the central bank raised the key rate range by 75 basis points - to the highest level since 2008 - 3.00-3.25%. The decision was then taken unanimously by all 12 voting members of the Fed's Open Market Committee.
In addition, representatives of the US central bank announced that they would continue to reduce the holdings of treasury and mortgage-backed securities, as well as agency debt.
A tangible pressure factor on the European stock market on Thursday was also the weak performance of US stock exchanges on the basis of trading results the day before. So, on Wednesday, The Dow Jones Industrial Average fell 0.10%, the S&P 500 sank 0.33%, and the NASDAQ Composite - 0.09%. The key indicators of the Asia-Pacific region also showed frightening negative dynamics on Thursday.
On Thursday morning, the German Federal Statistical Office published data on consumer prices in the country. Thus, according to the latest statistics from Destatis, in September, annual inflation in Germany accelerated to a record level of 10% against 7.9% in August. In monthly terms, this figure increased by 2.2%. At the same time, the dynamics of annual and monthly inflation coincided with analysts' preliminary forecasts.
The weak results of the past month in the dominant economy of the eurozone increase pressure on the European Central Bank to further tighten the central bank's monetary policy.
Trading results the day before
On Wednesday, European stock indexes closed in the red for the sixth consecutive session. Protracted pessimism on world markets provoked investors' concern about further tightening of the monetary policy of the US Fed in the face of permanently rising inflation.
As a result, the composite index of the leading European companies STOXX Europe 600 sank by 0.53% to 385.88 points.
The French CAC 40 shed 0.25%, the German DAX shed 0.39% and the UK FTSE 100 shed 0.86%.
The value of securities of the Dutch manufacturer of consumer goods and medical equipment Philips NV collapsed by 12.3%. 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.
Quotes of the German company Tag Immobilien, operating in the field of real estate, fell by 13.1%.
The market capitalization of French luxury goods maker LVMH Moet Hennessy Louis Vuitton SA increased by 1.9%. 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 Holding AS soared 14.3% on strong quarterly results and a positive outlook for the year.
On Wednesday, participants in the stock market in Europe evaluated the latest statistical data 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 the July decline of 3.2%. 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.
