On Wednesday, European stocks initially held steady but later retracted, ultimately closing lower as investors weighed the implications of Donald Trump's victory in the U.S. Presidential Election. Early in the session, optimism was buoyed by Trump's win and positive regional economic data. However, concerns about Trump's potential trade policies, such as increased tariffs and possible international tensions, dampened market sentiment. Investors also anticipated upcoming monetary policy decisions from the Federal Reserve set for Tuesday and the Bank of England scheduled for Thursday.
The pan-European Stoxx 600 ended the day down by 0.54%. Germany's DAX slipped 1.13%, France's CAC 40 decreased by 0.51%, while the U.K.'s FTSE 100 saw a marginal decline of 0.07%. Switzerland's SMI closed 0.16% lower.
Elsewhere in Europe, markets in Austria, Belgium, Denmark, Finland, Ireland, the Netherlands, Norway, Portugal, Spain, and Sweden posted gains, ranging from moderate to sharp. Conversely, Greece, Iceland, Poland, Russia, and Turkiye experienced declines.
In the U.K., Ashtead Group, Barclays, and IHG experienced significant gains of 5.2 to 5.6%. Stocks like BAE Systems, 3i Group, Marks & Spencer, Smith (DS), Pershing Square Holdings, Entain, and IAG rose between 3% and 5%.
Beazley saw a notable surge after reaffirming its full-year target for an undiscounted combined ratio of around 80%, while Prudential climbed after reporting an 11% rise in new business profit for the first nine months of fiscal 2024. Notably, Marks & Spencer advanced 2% after surpassing first-half profit expectations. Other notable gainers included Standard Chartered, Coca-Cola, Compass Group, Tesco, NatWest Group, and Scottish Mortgage.
Shares of Lancashire Holdings initially soared over 10% following a 9% year-on-year growth in gross written premiums to $1.7bn for the first nine months of 2024, but later pared gains to end slightly higher. Persimmon saw a steep decline of more than 8.5% due to concerns about rising build costs affecting price negotiations for 2025. Intertek Group dropped 4.7%, with companies like Taylor Wimpey, Smith & Nephew, Fresnillo, Antofagasta, BT Group, British Land, Barratt Redrow, and Berkeley Group Holdings closing down between 3% and 4.1%. Frasers Group, Hikma Pharmaceuticals, Unilever, Endeavour Mining, Diageo, Vistry Group, and Segro also saw significant downturns.
In Germany, Mercedes-Benz, Zalando, and BMW saw losses of 6% to 6.8%, with BMW reporting a 61% decrease in quarterly third-quarter profit. Other decliners included Volkswagen, Porsche, Sartorius, RWE, Deutsche Post, Commerzbank, Adidas, Infineon, Beiersdorf, Henkel, Bayer, Symrise, Merck, and Siemens Energy, which fell between 1.7% and 5.1%.
Conversely, Siemens Healthineers and Fresenius Medical Care rose 5.6% and 5.5%, respectively, with Siemens Healthineers reporting revenue growth and full-year EBIT in line with expectations. Puma ended nearly 3% lower after disappointing Q3 sales figures.
Rheinmetall, Fresenius, HeidelbergCement, MTU Aero Engines, and Deutsche Bank posted gains, ranging from 1.8% to 3%. In the French market, Thales increased by over 3%, while Publicis Groupe, Stellantis, Essilor, STMicroElectronics, Safran, Carrefour, Edenred, Dassault Systemes, and Accor saw gains of 0.6% to 1.8%. Credit Agricole closed 4.3% lower after mixed Q3 results, as weaknesses in its retail businesses overshadowed strong investment banking revenues. Pernod Ricard fell 3.7%, with BNP Paribas, L'Oreal, Teleperformance, Bouygues, Danone, Vivendi, Veolia, Air Liquide, Unibail-Rodamco, Engie, and TotalEnergies also declining between 1.4% and 3.2%.
Germany reported a rebound in factory orders for September, driven by strong growth in orders for aircraft and other transport equipment, according to Destatis data. Orders increased 4.2% monthly, contrasting with a revised 5.4% decline in August. Economists had expected more moderate growth of 1.6% following September's initially estimated 5.8% decline.
In the U.K., construction sector growth slowed significantly in October, although civil engineering work kept the industry activity robust, as per S&P Global survey results. The construction Purchasing Managers' Index registered at 54.3 in October, down from 57.2 in September, marking the eighth consecutive month of expansion.
October saw stagnation in the eurozone's private sector, as manufacturing contraction was offset by growth in services, according to final survey results from S&P Global. The HCOB composite output index remained unchanged at 50.0 in October, showing no change in private sector output, an improvement from September's 49.6 and above the flash estimate of 49.7.
Eurostat data revealed that euro area producer prices fell on a monthly basis for the first time in four months in September, spurred by a decline in energy prices. Producer prices in the domestic market decreased by 0.6% month-on-month, reversing a similar gain seen in the previous month and marking the first decline since May.
