Europe ends under pressure as commodities slump, mixed earnings weigh on sentiment

European equities came off their session lows, yet failed to end Wednesday’s trade on a positive note, as market sentiment was hit by a downturn in commodity stocks and prices.

After falling more than 1 percent in earlier trade, the pan-European STOXX 600 pared losses to close down 0.49 percent provisionally.

Looking to bourses, the U.K.’s FTSE 100 ended down 0.56 percent, while France’s CAC 40 dipped 0.27 percent and Germany’s DAX fell 0.44 percent.

Meanwhile, the majority of sectors finished the session in the red. Weak performance from markets in Asia and in the U.S. also weighed on performance in Europe.

Basic resources was one of Europe’s biggest sectoral losers, as lower-than-expected retail sales and industrial production figures seen Tuesday and a decline in metal prices seen Wednesday impacted trade. Copper producer Aurubis fell 4 percent.

Oil and gas meanwhile sank 1.49 percent due to weaker oil prices. While Brent and WTI crude came off session lows, prices were still in negative territory by the European market close.

This drop came after a report from the International Energy Agency which projected lower oil demand for this year and the next, and news that U.S. crude stockpiles had risen by 1.9 million barrels.

Looking at individual stocks, Barratt Developments fell over 1 percent despite announcing an increase in total forward sales of 8.4 percent and stating that it was confident that it would deliver a good operating performance in the 2018 financial year.

The German rubber maker Lanxess fell over 3 percent after reporting a third quarter net profit lower than a year ago. Meanwhile, potash miner K+S sank over 5 percent, after its operating profit and third quarter revenue failed to meet market expectations.

On the other hand, Airbus popped 2.35 percent after receiving a 430 airplane order from Indigo Partners.

Cobham rose over 3.5 percent before paring gains to close up 2.36, after it issued a trading statement saying its performance for this year remained “unchanged”.

In other corporate news, Volkswagen said that tax authorities and prosecutors raided the offices of the company’s chief financial officer, head of HR, and chairman on Tuesday. Some files and computers were seized, according to Reuters. Shares closed lower.

Telecoms outperformed fellow sectors, closing up 0.55 percent, with Altice leading the way, after Bryan Garnier put a “buy” rating on the stock, and the company tried to soothe sentiment by stating that it was shifting focus to reducing its net debt, from acquisitions, Reuters reported. Altice rose 8 percent by Europe’s close.

In terms of data, employment in the U.K. fell by the most it has in more than two years during July to September, a sign that a Brexit slowdown could be having an effect on U.K. job creation, Reuters reported. Source: CNBC

Comments
Loading...