On Monday, European stocks experienced a broad decline as investors exercised caution, opting to hold back from making significant moves in light of the impending U.S. Presidential election and the Federal Reserve's monetary policy announcement scheduled for Tuesday and Wednesday, respectively.
Market participants continued to focus on corporate earnings updates and economic data, which swayed investor sentiment. Expectations are high that the U.S. Federal Reserve will proceed with a 25 basis point interest rate cut, following a substantial 50 basis point reduction announced in September. Additionally, market analysts anticipate the Bank of England will also implement a 25 basis point cut during its meeting on Thursday.
Across the continent, the pan-European Stoxx 600 dipped by 0.33%. In Germany, the DAX fell by 0.56%, while France's CAC 40 suffered a 0.5% drop. Conversely, the UK's FTSE 100 managed a slight increase of 0.09%, whereas Switzerland's SMI decreased by 0.59%.
Other European markets, including Belgium, Denmark, Finland, Iceland, Ireland, the Netherlands, Norway, Portugal, Spain, and Türkiye, also closed with losses. However, Poland, Russia, and Sweden observed modest gains, Austria edged up slightly, and Greece remained virtually unchanged.
In the UK market, shares of Hiscox and Melrose Industries dropped by approximately 3% and 2.7%, respectively. Companies like Weir Group, Endeavour Mining, Centrica, BAE Systems, Fresnillo, Beazley, ICG, IHG, Rentokil Initial, Pershing Square Holdings, and Intertek Group saw declines ranging from 1% to 2%. In contrast, Natwest Group and Smith (DS) rose by 2.61% and 2.5%, respectively, while Frasers Group, Antofagasta, BT Group, Schroders, Barclays, HSBC Holdings, Tesco, and BP gained between 1% and 1.7%. Notably, Burberry Group shares surged 6% amid speculation of a possible bid by Italy's Moncler for the luxury firm.
Germany's market saw Vonovia, Fresenius, Rheinmetall, Puma, SAP, and Bayer lose between 1% and 2.2%. Symrise, Sartorius, BASF, and Infineon ended significantly lower as well. Meanwhile, Porsche advanced by 2.3%, RWE improved by roughly 1.55%, and both Qiagen and Fresenius Medical Care increased by about 1.15%.
In France, STMicroElectronics' shares fell around 2.7% after a downgrade by Morgan Stanley to "underweight" from "equal weight." Schneider Electric faced a decline exceeding 2% after its CEO, Peter Herweck, was abruptly replaced due to strategic execution concerns. Dassault Systèmes, Thales, Saint-Gobain, Accor, Capgemini, Stellantis, and Sanofi saw decreases ranging from 0.9% to 2.1%. On the upside, Essilor rallied by more than 3%, and Teleperformance and Kering gained nearly 2% and 1.5%, respectively, with Credit Agricole, Carrefour, ArcelorMittal, and Safran registering modest gains.
On the economic front, manufacturing activity in the euro area contracted in October, although at the slowest rate in five months, as reflected by S&P Global's data. The HCOB manufacturing Purchasing Managers' Index climbed to 46.0 in October from 45.0 the previous month, indicating that the decline in the sector is the least pronounced since May.
Furthermore, the Sentix Survey, a key indicator of investor sentiment, revealed a second consecutive month of improving confidence in the euro area for November. This was fueled by a slight recovery in German economic data and optimism surrounding the U.S. Presidential election outcome, with investors also eagerly anticipating substantial stimulus news from China. The Sentix investor confidence index for the Eurozone rose to -12.8 from -13.8 in October, with economists having anticipated a score of -12.7. The survey's current situation index improved to -21.5 from -23.3 in the previous month, while the expectations index remained steady at -3.8 in November.
