European Stocks Close Lower As Investors React To Economic Data, Earnings Updates

European stocks closed weak on Wednesday, with investors reacting to a slew of economic data from the region, the UK budget, and corporate earnings updates, in addition to closely tracking U.S. economic data and following the developments on the geopolitical front.

British Finance Minister Rachel Reeves confirmed plans for new fiscal rules aimed at strengthening public services and addressing a funding gap, all while maintaining a commitment to promote growth and investment.

Reeves said the budget would raise taxes by £40 billion ($51.86 billion) in a bid to plug what the Labour government has described as a “black hole” in the country’s public finances.

The pan European Stoxx 600 dropped 1.25%. The U.K.’s FTSE 100 closed down 0.73% and Germany’s DAX ended 1.13% down, while France’s CAC 40 and Switzerland’s SMI both fell 1.1%.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Poland, Portugal, Spain and Sweden ended with sharp to moderate losses.

Russia and Turkiye closed notably higher, while Norway ended flat.

In the UK market, Anglo American Plc ended nearly 4% down. GSK ended down 3% after the company reported a loss in the third quarter and lowered its 2024 vaccine sales forecast.

AstraZeneca, Diageo, Spirax Group, Fresnillo, Antofagasta, Experian, Convatec Group, Relx, Lloyds Banking Group, Centrica, Rio Tinto, Reckitt Benckiser, BP and HSBC Holdings lost 1 to 3%.

Entain surged 8.7%. Standard Chartered rallied 4.13% after the lender upgraded its 2024 income guidance after profits in the third quarter beat market estimates. Croda International Group gained 3.12%.

Glencore ended notably higher after the company maintained its production forecast for the current year. Next moved up after raising outlook for third time in three months.

Imperial Brands, Smith (DS), Pearson, B&M European Value Retail, Barclays Group, Howden Joinery, Airtel Africa, Glencore, Halma and Easyjet gained 1 to 2.7%.

In the German market, Fresenius Medical Care ended nearly 6% down. Daimler Truck Holding ended more than 1% down, after an announcement that it is writing off some of its receivables in China.

Infineon, Sartorius, Fresenius, Bayer, Porsche, Siemens Healthineers, SAP, E.ON, BMW, Beiersdorf, Mercedes-Benz, Deutsche Post, Deutsche Bank and Rheinmetall lost 1 to 4%.

Volkswagen gained about 1.3% after backing its annual sales guidance. Commerzbank, Zalando, Munich RE and Qiagen posted modest gains.

In the French market, Capgemini fell by more than 6%. The IT consulting group cut its 2024 revenue target for the second time this year.

Pernod Ricard, STMicroElectronics, Vivendi, Kering, Edenred and Eurofins Scientific closed lower by 3 to 4%.

L’Oreal, LVMH, Publicis Groupe, Dassault Systemes, Renault, Bouygues, Orange, Stellantis, Carrefour and Credit Agricole lost 1 to 2.2%.

Saint-Gobain climbed about 1.4%. Schneider Electric gained after third-quarter revenue rose to record levels. Legrand also ended with a modest gain.

In economic news, France’s economic growth doubled in the third quarter as the Paris Olympic and Paralympic Games boosted consumption, official data revealed. Gross domestic product posted a quarterly growth of 0.4% after expanding 0.2% in the second quarter, first estimate from the statistical office INSEE showed. This was also better than economists’ forecast of 0.3%.

The German economy expanded unexpected in the third quarter, underpinned by household and government consumption, preliminary estimate from Destatis showed. Gross domestic product grew 0.2% from a quarter ago, in contrast to the revised 0.3% contraction posted in the second quarter.

Germany’s unemployment rate remained unchanged in October, figures from the Federal Employment Agency revealed Wednesday. The unemployment rate remained unchanged at 6.1% in October, in line with expectations.

Eurozone economic growth accelerated in the third quarter, a preliminary flash estimate published by Eurostat showed. Gross domestic product increased 0.4% on a quarterly basis. GDP was expected to log 0.2% growth, the same rate as seen in the second quarter. Year-on-year, economic growth improved to 0.9% from 0.6% in the second quarter. This was also better than economists’ forecast of 0.8%.

Eurozone economic confidence weakened to an eight-month low in October, falling to 95.6 from 96.3 in the previous month, survey data from the European Commission showed. This was above forecast of 96.4.

A measure signaling future turning points in the Swiss economy weakened notably in October as the recovery of the economy is very uncertain. The economic barometer dropped to 99.5 in October from 104.5 in September. Meanwhile, economists had forecast a score of 105.1.