European stocks ended the week on a downbeat note, influenced by corporate earnings reports and the implications of interest rate decisions by the Bank of England and the Federal Reserve. Investor sentiment was further dampened by weak commodity prices, geopolitical tensions, and concerns over the potential impact of Donald Trump's protectionist policies on the global economy.
In Germany, political turmoil added to the unease. Opposition leader Friedrich Merz criticized Chancellor Olaf Scholz, accusing him of postponing an early election until March for political gains. Merz dismissed Scholz's strategy and advocated for a January election, arguing that Europe's largest economy needs urgent measures to spur significant growth.
In Asia, China's National People's Congress endorsed a proposal from the State Council to raise the local government debt ceiling by $838 billion following a week-long session. However, the market reaction was subdued, as the anticipated stimulus was less extensive and immediate than expected.
The pan-European Stoxx 600 index declined by 0.65%. The UK's FTSE 100 fell 0.84%, Germany's DAX dropped 0.76%, France's CAC 40 decreased by 1.17%, and Switzerland's SMI went down by 1%. Among other European markets, Austria, Belgium, Finland, Iceland, Ireland, Netherlands, Norway, Poland, Spain, and Sweden saw losses, whereas Denmark, Greece, Portugal, Russia, and Turkey traded positively.
In the UK, Vistry Group shares plummeted 15.5% following a downward revision of its annual adjusted profit forecast, attributed to difficulties in its South Division, alterations in other regions, and lowered completion expectations. Antofagasta's shares decreased by 6.6%, while Glencore, Rio Tinto, Marks & Spencer, Prudential, and Anglo American Plc saw declines ranging from 4.3% to 5%. HSBC Holdings, Sainsbury (J), Lloyds Banking Group, JD Sports Fashion, Barratt Redrow, BP, Persimmon, and Mondi closed down by 2% to 3.6%.
Contrastingly, IAG surged more than 7% after reporting a better-than-expected quarterly profit, and Endeavour Mining gained 4.25%. AstraZeneca advanced around 2% after the Phase III WAYPOINT study of its Tezspire with Amgen in patients with chronic rhinosinusitis with nasal polyps achieved its co-primary endpoints. Additionally, IHG, BT Group, Pearson, Hikma Pharmaceuticals, Intertek Group, Entain, Relx, Unite Group, and Segro rose by 1% to 3%.
In Germany, BASF saw a decline of about 5%, and Daimler Truck Holding fell nearly 4%. BMW, Deutsche Bank, Mercedes-Benz, Siemens, Volkswagen, Continental, Sartorius, and Adidas registered losses of 2% to 3.1%. Siemens Healthineers, Porsche, Bayer, Commerzbank, and Infineon concluded the day down by 1% to 1.4%. On a positive note, Vonovia rallied approximately 3%, while Siemens Energy and Zalando gained 2.1% and 2% respectively. Fresenius Medical Care, HeidelbergCement, Deutsche Telekom, and Symrise also finished the day with notable gains.
In France, Kering dropped nearly 8%, with Hermes International, Stellantis, LVMH, L'Oreal, and Teleperformance experiencing declines of 3% to 4%. ArcelorMittal, Edenred, STMicroelectronics, Airbus Group, TotalEnergies, Safran, and Publicis Groupe also ended the day significantly lower.
On the economic front, data from France revealed a widening of the trade deficit to a near one-year high in September, reaching EUR 8.3 billion compared to EUR 7.7 billion in August, contrary to economists' expectations of a narrowing deficit of EUR 7.0 billion. Monthly exports fell by 1.4%, while imports saw a marginal drop of 0.3%. Year-on-year, exports decreased by 3.4%, and imports fell by 4.4% in September.
