Last Friday, the leading stock indicators of Western Europe rose by more than 1% against the background of the release of the final statistics on business activity in the region for October.
Thus, at the time of writing, the French CAC 40 rose by 1.46%, the German DAX gained 1.14%, and the British FTSE 100 jumped 1%.
Leaders in growth
Europe's STOXX 600 Basic Resources index, which contains major mining stocks, soared almost 5% last Friday. Against this background, the value of securities of the British company Anglo American rose by 7.4%, the Swiss Glencore - by 3.1%, the Australian BHP Group - by 4.98%, the Luxembourg ArcelorMittal - by 4.57%, and the Australian-British Rio Tinto - by 5.99%.
Market sentiment
Last Friday, European investors discussed the released macroeconomic data for the region. Thus, the American analytical corporation S&P Global reported that, according to the final assessment, in October, the composite index of business activity (PMI) in industry and the service sector of 19 eurozone countries fell only to 47.3 points from 48.1 points in September. At the same time, the preliminary estimate of PMI was at the level of 47.1 points.
Trading results the day before
On Thursday, European stock indices ended their second session in a row in the red zone. Only the British stock index FTSE 100 showed a steady growth. On the eve of Friday, investors analyzed corporate earnings reports for the third quarter of 2022 from key European companies, as well as the results of the November meetings of the US Federal Reserve and the Bank of England.
Thus, the summary index of the leading European companies STOXX Europe 600 fell by 0.9% to 409.55 points.
The French CAC 40 sank 0.54%, the German DAX shed 0.95% and the UK FTSE 100 rose by 0.62%.
The share price of British supermarket group J Sainsbury PLC increased by 7%. The day before, the company confirmed its financial forecasts for 2022 and announced a 22% increase in dividends. In addition, according to the results of the first financial half of the year, which ended on September 17, the retailer increased its revenue by 4.4%.
Swiss online pharmacy chain Zur Rose Group AG plunged 16.6%.
Despite an increase in the company's revenue in the third quarter amid growth in car sales and higher prices for them, the market capitalization of the Dutch automaker Stellantis NV sank 3.3%. The day before, it was announced about the problems of the company in the supply chains, which may negatively affect future sales.
The share price of the German automaker Bayerische Motoren Werke AG fell 4.7%. However, thanks to a well-structured pricing policy, the company increased net profit and revenue in the period from July-September 2022.
German apparel and accessories maker Hugo Boss AG plunged 3.7%, although in the third quarter of fiscal 2022 the company increased its net profit by 12% and revenue by 24%.
Dutch financial conglomerate ING Groep NV soared 8.5% despite a 28.5% decline in net income in the third quarter of 2022. The Dutch lender also announced a $1.47 billion buyback program that will run until December 31st.
Market capitalization of the largest French bank BNP Paribas SA increased by 3.1%. In the third quarter of fiscal year 2022, thanks to strong trading income, the company increased net profit and revenue by 10% and 8%, respectively. Both final indicators of the French lender beat analysts' expectations.
The share price of French insurer AXA SA increased by 1.2%. The company managed to slightly increase revenue due to the recovery in health insurance segment revenue from July to September 2022.
The value of securities of Europe's largest online fashion store Zalando fell by 1.7%. The day before, the company announced that a significant drop in revenue and operating profit is expected at the end of the year.
The British telecommunications company BT Group sank 8.9% amid an 18% drop in profits in April-September due to increased energy costs. By the way, the final decline in the company's securities was the maximum daily decline since the beginning of 2020.
The market capitalization of the British retail chain Tesco increased by 2.9%.
The share price of the British-Dutch oil and gas company Shell rose by 2.6%.
Dutch pharmaceutical company Shop Apotheke Europe plunged 13.4%.
On Thursday, investors discussed not only the quarterly reports of leading European companies, but also macroeconomic data for the region. Thus, according to the results of September, the unemployment rate in 19 eurozone countries was 6.6%, which was slightly lower than the August level of 6.7%.
Over the past month, the number of unemployed in Spain decreased by 27,000 compared to September and amounted to 2.915 million people. The final October figure was the lowest since autumn 2008. While experts predicted an increase in the number of unemployed by 42,000 people.
On Wednesday evening, the results of the two-day November meeting of the US Fed were published. The American regulator expectedly increased the interest rate by 75 basis points for the fourth time in a row. Now the rate range is 3.75-4% per annum, the maximum value since January 2008.
Market participants expected the Fed to signal a slowdown in monetary tightening going forward. However, comments by Central Bank Chairman Jerome Powell dispelled these hopes. According to him, it is "very premature" to expect a pause in the issue of raising the interest rate.
On Thursday evening, decisions on monetary policy and macroeconomic forecasts from the Bank of England were announced. Thus, the regulator increased the base interest rate by 75 basis points - up to 3% from 2.25% per annum, as predicted by most market analysts. As a result of the meeting, it was decided to raise the rate for the eighth time in a row, and the pace of its rise became a record since 1989. Moreover, most of the regulator's leaders have warned that the base rate hike will continue.
Representatives of the Bank of England also said that the country's economy is entering a period of recession, which could last for the next eight quarters.
The regulator also published updated macroeconomic forecasts. According to predictions, the UK gross domestic product could decline by 0.5% in the third quarter, and the inflation rate in 2022 could peak at around 10.9%.
