European Stocks Close On Mixed Note As Markets React To Earnings, ECB Policy

European stocks recovered from early losses and ended on a mixed note on Thursday as investors digested the European Central Bank’s interest rate decision, in addition to reacting to a slew of economic data and earnings updates from the region.

The European Central Bank today raised its interest rate by 75 basis points, the third consecutive increase this year. The bank also announced that it was changing the terms and conditions of its targeted longer-term refinancing operations, or TLTROs — a tool that provides European banks with attractive borrowing conditions, designed to incentivise lending to the real economy.

The ECB also signaled that policymakers look forward to hike rates more in the months ahead as inflation is expected to stay high for an extended period.

Following today’s hike, ECB’s main refinancing rate now stands at 2%, the deposit facility rate at 1.5%, and the marginal lending facility rate at 2.25%.

“With this third major policy rate increase in a row, the Governing Council has made substantial progress in withdrawing monetary policy accommodation,” the central bank said in a statement.

“The Governing Council took today’s decision, and expects to raise interest rates further, to ensure the timely return of inflation to its 2 percent medium-term inflation target.”

The pan European Stoxx 600 edged down 0.03%. The U.K.’s FTSE 100 advanced 0.25% and Germany’s DAX gained 0.12%, while France’s CAC 40 dropped 0.51%. Switzerland’s SMI ended lower by 1.02%.

Among other markets in Europe, Austria, Czech Republic, Iceland, Netherlands, Norway, Poland, Russia and Spain closed higher.

Belgium, Denmark, Finland, Greece, Ireland, Portugal, Sweden and Turkiye ended weak.

In the UK market, Shell climbed nearly 5.5% after the company reported a profit in the third-quarter. BP gained about 3.5%, while Harbour Energy, Melrose Industries, Rolls-Royce Holdings, Entain, Unite Group, Standard Chartered, Land Securities, Segro, Admiral Group and United Utilities gained 1.5 to 3%.

Airtel Africa tanked 15.1%. Rio Tinto, Coca-Cola HBC, Glencore, Intertek Group, Reckitt Benckiser and Anglo American Plc ended lower by 2 to 4%.

In Germany, Deutsche Bank and Vonovia both gained about 5%. Deutsche Wohnen, Continental, HeidelbergCement, Allianz, BASF, E.ON, and Munich RE gained 1 to 2.3%.

HelloFresh plunged more than 6%. Infineon Technologies drifted down 3.5%, while Adidas, Puma, Zalando, Symrise, Qiagen and Merck lost 1.6 to 2.7%.

In the French market, Faurecia rallied nearly 4%. Carrefour gained about 3% on strong qurterly earnings, and Michelin advanced nearly 2.5%.

Air France-KLM, Unibail Rodamco, Valeo and Accor gained 1.6 to 2%.

STMicroElectronics tumbled nearly 7%. Schneider Electric, Dassault Systemes, WorldLine, Essilor, Atos and Saint Gobail lost 2 to 3.4%.

In the Swiss market, Credit Suisse shares plummeted more than 15% after the lender reported a net loss of CHF 4.034 billion in the third quarter.

Survey results from the market research group GfK showed Germany’s consumer confidence is set to improve in November from a record low even in the midst of recession fears. The forward-looking consumer sentiment index rose to -41.9 in November, in line with expectations, from revised -42.8 in October.

UK retail sales expanded strongly in October after last month’s decline, the Distributive Trades Survey from the Confederation of British Industry showed on Thursday.

A net 18% of retailers said their sales volume increased in October, in contrast to a net -20% reporting a fall in sales in September. However, a balance of -9% forecasts retail sales to fall next month.

UK car production declined for the first time in five months in September, as output was again restricted by severe supply chain issues affecting manufacturers, the Society of Motor Manufacturers and Traders, or SMMT, said today.

Car production dropped 6% year-over-year in September, reversing a 34% strong growth in August.

The latest fall in output was attributed to on-going severe supply chain issues along with higher energy costs and component shortages.