European stocks faced a downturn on Tuesday following two days of upward momentum. Mixed regional data and lingering geopolitical concerns in the Middle East contributed to a cautious market outlook ahead of Thursday's European Central Bank meeting.
Recent data from Germany indicated a significant drop in wholesale prices, marking the steepest decline seen in five months for September. However, on a more positive note, German investor confidence showed an improvement for the first time in four months.
In France, consumer price inflation decreased slightly more than anticipated in September, reaching its lowest level in three and a half years, largely due to falling energy costs, as reported by the national statistics bureau, INSEE.
Similarly, data from the United Kingdom revealed a softening in wage growth to its lowest point in over two years during the three months to August. This decline in wage growth bolsters expectations that the Bank of England may consider further interest rate reductions at its upcoming meeting.
The pan-European STOXX 600 index declined by 0.2%, settling at 523.72, after previously closing 0.5% higher, reaching a two-week peak on Monday.
In specific national indexes, the German DAX saw a slight gain, while France's CAC 40 dropped by 0.8%, and the U.K.'s FTSE 100 fell by 0.4%.
Significant market movements included a substantial 8.4% rise in LM Ericsson shares in Stockholm after the telecom giant reported profits in its third quarter, contrasting with the previous year's losses.
Meanwhile, Tele2 AB shares climbed by 2% following the announcement of Jean-Marc Harion's appointment as President and CEO, effective November 10, 2024.
On the downside, BP Plc shares fell 4.2% and Shell decreased nearly 3% as oil prices plunged by up to $3, hitting a near two-week low. This drop was fueled by a lower demand forecast from the International Energy Agency and news that Israel's planned retaliatory actions against Iran will not target nuclear or oil facilities.
Workspace Group saw a 1% decline in its stock after reporting a decrease in like-for-like occupancy, attributed to an unusually high departure rate of customers in the second quarter.
On a positive note, Bellway shares rose by 7.2% after the company provided an encouraging outlook on the recovery of the U.K. housing market.
Conversely, TotalEnergies SE experienced a 4.1% dip in shares in Paris, following a warning from the oil major that its third-quarter downstream results are likely to see a sharp decline due to reduced refining margins in Europe and other regions.
Deutsche Bank shares dropped by 2.4% following news of the sale of approximately 16 million shares in the bank, priced at 16.01 euros ($17.43) per share.
