European Markets Close Notably Lower Ahead Of Key Data, ECB Policy

European markets ended weak on Tuesday, weighed down by losses in automobile, pharmaceutical and biotech sectors. The mood was cautious with investors awaiting key U.S. inflation data and the European Central Bank’s monetary policy announcement due later in the week.

Investors also awaited the debate between U.S. presidential nominees Donald Trump and Kamala Harris, later today

The pan European Stoxx 600 ended down 0.54%. The U.K.’s FTSE 100 closed lower by 0.78%, Germany’s DAX dropped 0.96% and France’s CAC 40 settled 0.24% down. Switzerland’s SMI edged down 0.13%.

Among other markets in Europe, Austria, Belgium, Denmark, Greece, Iceland, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Turkiye all closed notably lower.

In the UK market, Barclays ended down 3.25%. Melrose Industries closed nearly 3% down. AstraZeneca lost nearly 2.5% after its lung cancer drug showed mixed results in a late-stage trial.

Centrica, Natwest Group, Croda International, BP, B&M European Value Retail and BT Group lost 2 to 2.5%.

Prudential, HSBC Holdings, Glencore, Standard Chartered, Shell, Vodafone Group, Hikma Pharmaceuticals, Lloyds Banking Group and Intertek Group ended down 1.2 to 2%.

Unite Group rallied nearly 4%. JD Sports Fashion gained about 3.5%. Londonmetric Property, Howden Joinery, Fresnillo, Vistry Group, Endeavour Mining, RightMove, Marks & Spencer, Taylor Wimpey and Segro advanced 1 to 2.5%.

Centamin jumped nearly 25% after AngloGold Ashanti made a $2.5 billion (about R44.6 billion) bid in a mix of shares and cash to acquire the gold miner.

In the German market, BMW shares plunged more than 11% after the company cut its 2024 profit margin guidance, citing problems with Continental’s brakes and other factors. Continental shares tumbled 10%

Mercedes-Benz and Volkswagon ended down 4.7% and 3.3%, respectively. Porsche AG ended lower by 1.7% and Daimler Truck Holding lost about 3.5%.

BASF, Commerzbank, Deutsche Bank, Infineon and Adidas closed lower by 2 to 4.5%. Zalando, HeidelbergCement, Puma and Deutsche Boerse also ended notably lower.

Fresenius Medical Care climbed about 4.3%. Vonovia gained 2.3%, while Qiagen and MTU Aero Engines ended higher by about 1.2% and 1.1%, respectively.

In the French market, STMicroElectronics, Renault and Stellantis lost 3.2 to 3.5%. ArcelorMittal, TotalEnergies, Societe Generale, Bouygues, Vivendi, L’Oreal and Credit Agricole closed lower by 1 to 2.2%.

Capgemini surged about 5.4% thanks to strong momentum in the tech sector following Oracle’s better-than-expected revenue growth.

Air Liquide, Unibail Rodamco and Dassault Systemes gained 1.4 to 2%, while Thales, Safran and Airbus Group posted moderate gains.

On the economic front, the UK unemployment rate dropped in the three months to July and the wage growth softened to a two-year low, signalling that the labor market conditions continued to cool, official data revealed.

The unemployment rate fell to 4.1% in the three months to July from 4.2% in the preceding period, data published by the Office for National Statistics showed.

Germany’s consumer price inflation weakened, as initially estimated, in August due to falling energy prices, final data from Destatis showed. Consumer price inflation softened to 1.9% in August from 2.3% in July. The rate matched the provisional estimate published on August 29.

The last time inflation was below 2% was in March 2021, when the rate was 1.8%.

EU harmonized inflation also softened to 2%, as estimated, from 2.6% in July. A similar rate was last reported in March 2021.

The decline in energy prices deepened to 5.1% from 1.7% in the previous month. Meanwhile, food prices increased 1.5%.

Core inflation, excluding food and energy prices, slowed slightly to 2.8% in August from 2.9% in the previous month. The core rate also matched the flash estimate.

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