European Shares Mostly Higher In Cautious Trade; CAC 40 Underperforms

European stocks were flat to slightly higher on Wednesday, with French stocks underperforming.

Dovish Fed talk and China stimulus hopes helped underpin investor sentiment ahead of the release of minutes of the Fed’s September policy meeting later in the day and U.S. inflation data due on Thursday.

Meanwhile, Germany’s consumer price inflation eased to the lowest level in just over one-and-a-half years in September, as initially estimated, the latest data from Destatis showed earlier today.

The consumer price index rose 4.5 percent year-on-year in September, slower than the 6.1 percent rise in August. That was in line with the flash data published on September 28.

Further, this was the lowest rate since February 2022, when inflation stood at 4.3 percent.

ECB policymaker Francois Villeroy de Galhau expressed confidence on Tuesday that inflation should still land at the target rate of around 2 percent by 2025 despite the violence in Israel.

The pan European STOXX 600 edged up 0.1 percent in choppy trade after rallying 2 percent on Tuesday.

The German DAX was little changed and the U.K.’s FTSE 100 was up 0.2 percent while France’s CAC 40 dropped 0.6 percent, dragged down by luxury goods makers.

In corporate news, German kidney dialysis provider Fresenius Medical Care plunged 18 percent after Danish drug maker Novo Nordisk said its weight-loss drug showed success in a trial for kidney failure in diabetes patients. Shares of the latter jumped 3.3 percent.

BP Plc rose 1.6 percent and Shell added about 1 percent in London as oil prices ticked higher on lingering worries about supply disruptions.

Avingtrans surged over 5 percent after bagging two nuclear waste contracts.
British bus and rail operator FirstGroup rallied 3.6 percent after raising its annual profit outlook.

Pub group Marston’s fell nearly 2 percent despite reporting a 11.3 per cent rise in sales in the year to the end of September.

Travis Perkins plunged 8 percent after the building merchant warned its annual profits will be far lower than forecast.

Page Group lost 5 percent. The recruitment firm warned that its full-year profits are likely to fall by at least a third as a result of ongoing challenging conditions across Asia, the U.K. and U.S. markets in the third quarter.

Roche Holding AG rose 1.2 percent. Genentech, a member of the Roche Group, announced encouraging late-breaking data from the Phase III OCARINA II study of Ocrevus, the company’s investigational drug to treat patients with relapsing or primary progressive multiple sclerosis.

French luxury goods bellwether LVMH slumped 6.2 percent after it reported lower sales growth in the third quarter in a sign that the post-pandemic luxury boom is waning. Peers Hermes and Kering fell around 2 percent each.

Accor S.A., a hospitality company, gained about 1 percent after launching a 400 million euros share buyback program.

Market Analysis