The pan-European Stoxx 600 index closed 1% lower, with mining stocks shedding 2.7% to lead losses while oil and gas nudged 0.25% higher.
Shares of European semiconductor manufacturers were broadly lower after a disappointing earnings report from Dutch chipmaker ASML, which posted lower-than-expected orders and warned of flat sales in 2024.
Earnings season is gathering steam in Europe, with SAP, Volvo, Deutsche Boerse and ABB among those reporting Wednesday.
Asia-Pacific markets clawed back some lost ground throughout the trading session, after fresh data showed stronger-than-expected economic growth out of China for the third quarter.
Stocks stateside were lower in morning trade on Wednesday, coming off a muted previous session as Wall Street assessed a host of major earnings reports alongside the bumper September retail sales figure. Morgan Stanley, Netflix and Tesla are the biggest names reporting Wednesday.
Economic data was also in focus early in the session as traders digested inflation data from the U.K. and the euro zone.
Meanwhile, U.S. President Joe Biden on Wednesday met with Israeli Prime Minister Benjamin Netanyahu in Tel Aviv and suggested the Gaza hospital blast that killed hundreds appeared to have been caused “by the other team.”
Hugh Gimber, global market strategist at J.P. Morgan, discusses the outlook for U.S. Treasury yields and Federal Reserve monetary policy and how this could impact equity markets.
U.S. stocks open lower
U.S. stocks opened Tuesday’s session down.
The Dow was down 0.1% shortly after 9:30 a.m. ET. The S&P 500 slid 0.4%, while the Nasdaq Composite shed 0.7%.
Biggest movers: Nexi up 13%, Genmab down 6%
Shares of Italian payments company Nexi rallied more than 13% by mid-afternoon after Bloomberg reported that private equity firm CVC Capital Partners is considering a takeover bid.
At the bottom of the Stoxx 600, Danish biotech company Genmab fell more than 6% after reporting lower-than-expected third-quarter sales for its major drug Darzalex.
European stocks retreat as Middle East escalation fears linger; Chip stocks fall on ASML earnings
The pan-European Stoxx 600 index was down 0.6% by late morning, with tech stocks shedding 1.6% while the oil and gas sector gained 0.7%.
U.S. President Joe Biden on Wednesday met with Israeli Prime Minister Benjamin Netanyahu in Tel Aviv and suggested the Gaza hospital blast alleged to have killed hundreds appeared to have been cause “by the other team.”
Shares of European semiconductor manufacturers were broadly lower after a disappointing earnings report from Dutch chipmaker ASML, which posted lower-than-expected orders and warned of flat sales in 2024.
Euro zone inflation eased in September, Eurostat confirms
Euro zone inflation came in at an annual 4.3% in September, European Union statistics agency Eurostat said Wednesday, confirming earlier estimates.
The headline consumer price index slowed markedly from August’s 5.2% annual increase, though inflation rates continued to diverge sharply across the bloc.
European Central Bank policymakers are currently weighing up their next move on interest rates, with various Governing Council members telling CNBC last week that the work to contain inflation was not yet done.
European stocks pare losses
The pan-European Stoxx 600 index recouped early losses to hover around the flatline by mid-morning. Telecoms stocks added 0.8% while industrials dropped 0.8%.
Nexi shares surge 15% after report of possible private equity bid
Shares of Italian payments company Nexi rallied more than 15% on Wednesday after Bloomberg reported that private equity firm CVC Capital Partners is considering a takeover bid.
Nexi shares remain down almost 10% year-to-date. The Italian government holds a 13.6% stake in the company through state lender CDP, and has the power to veto any unwanted takeover interest.
Adidas on Tuesday hiked its full-year guidance and posted stronger-than-expected third-quarter earnings, aided by sales of its Yeezy inventory.
The German sportswear giant projected a full-year operating loss of 100 million euros ($106 million), a significant improvement on its previous forecast of a 450 million euro loss, and expects revenues to decline at a low-single-digit rate for 2023.
Third-quarter operating profit came in at 409 million euros, down from 564 million for the same quarter in 2022.
Adidas shares climbed 4% during early trade in Europe on Wednesday.
Biggest movers: Worldline up 6%, ABB down 5%
Shares of French payment company Worldline climbed more than 6% in early trade to lead the Stoxx 600.
At the bottom of the index, Swedish-Swiss multinational industrial and engineering group ABB fell more than 5% after its third-quarter earnings report.
The company met profit projections but but dampened expectations for the fourth quarter amid weakness in Chinese robotics and construction demand.
A cautious open in Europe
The pan-European Stoxx 600 index slipped 0.2% in early trade, with tech stocks shedding 1.7% to lead losses while oil and gas stocks added 0.5%.
U.K. inflation came in at 6.7% in September, slightly ahead of expectations and unchanged from the previous month.
On a monthly basis, the headline consumer price index increased by 0.5%, in line with expectations. Economists polled by Reuters had projected an annual rate of 6.6% and a monthly climb of 0.5%.
The largest downward contributions came from food and non-alcoholic beverages, whose prices fell month-on-month for the first time since September 2021, the Office for National Statistics said Wednesday. Rising fuel prices made the largest upward contribution to the headline rate.
Core CPI — which excludes volatile food, energy, alcohol and tobacco prices — came in at 6.1% year-on-year, down from 6.2% in August, but slightly above a consensus projection of 6%.
“As we have seen across other G7 countries, inflation rarely falls in a straight line, but if we stick to our plan then we still expect it to keep falling this year,” U.K. Chancellor of the Exchequer Jeremy Hunt said in a statement.
“Today’s news just shows this is even more important so we can ease the pressure on families and businesses.”
Source : CNBC
