Major European Markets Fail To Retain Early Gains, Close Weak

Despite spending much of the day’s trading session in positive territory, most of the major markets in Europe closed weak on Tuesday as concerns about monetary tightening and economic slowdown continued to hurt sentiment.

Stocks moved higher early on in the session, and managed to stay in positive territory for a long time, thanks to bargain hunting after recent steep losses. However, with the mood turning cautious towards the end of the session, stocks gave up most of their gains.

The euro and the British Pound surged higher earlier in the day after the Bank of England (BoE) vowed it “will not hesitate” to change interest rates by as much as needed, intending to reassure markets unnerved by last Friday’s budget.

The BoE governor said the central bank is closely monitoring the weakness in the pound amid the turmoil in markets which saw the pound fall to a record low against the dollar.

Markets widely expect a non-scheduled interest rate hike from the BoE if the currency situation does not improve.

However, both the Euro and the Sterling came off higher levels and dropped below their previous closing levels later on in the session.

The pan European Stoxx 600 edged down 0.13%. The U.K.’s FTSE 100 ended lower by 0.52%, Germany’s DAX drifted down 0.72% and France’s CAC 40 lost 0.27%, while Switzerland’s SMI advanced 0.35%.

Among other markets in Europe, Austria, Czech Republic, Iceland and Spain ended weak.

Belgium, Denmark, Finland, Greece, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Sweden and Turkiye closed higher.

In the UK market, RightMove tumbled nearly 9%. SSE, Taylor Wimpey, Unite Group, Kingfisher, Barratt Developments, Segro, British Land, Rolls-Royce Holdings, National Grid and M&G lost 4 to 7.3%.

Glencore, Hargreaves Lansdown, Flutter Entertainment, Antofagasta, Smurfit Kappa Group, Rio Tinto, Anglo American Plc and Burberry Group gained 1.5 to 3.2%.

In Paris, Unibail Rodamco, Kering, Veolia, BNP Paribas, Airbus Group, Credit Agricole and Safran lost 1.2 to 3.1%.

Atos climbed more than 3%. Renault rallied 2.6%, while Valeo, Michelin, WorldLine, Air France-KLM and Carrefour gained 1.4 to 2%.

In the German market, Deutsche Bank dropped more than 4%. E.ON, Brenntag, Fresenius Medical Care, Fresenius, Adidas, Porsche Automobil and Deutsche Wohnen also declined sharply.

HelloFresh surged nearly 4%. Zalando gained about 2%, while Deutche Post, Qiagen and Infineon Technologies gained 1 to 1.2%.

In economic news, confidence among German exporters deteriorated further in September to reach its lowest level in more than two years and the trend is likely to continued amid a slowdown in the global economy, survey results from the ifo Institute showed.

The ifo Export Expectations index slipped to -6.0 points from -2.8 points in August. This was the lowest score since May 2020. The index fell for the fourth month in a row.

Eurozone money supply growth accelerated unexpectedly in August, and loans to the private sector rose at a faster rate, data published by the European Central Bank showed.

The broad monetary aggregate M3 grew 6.1% annually in August, faster than July’s 5.7% stable rate of increase, which was revised up from 5.5%. Meanwhile, the growth rate was forecast to slow to 5.4%.

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