On Tuesday, the leading stock indicators of Western Europe showed a decline for the fifth consecutive trading session amid negative dynamics of the exchanges of the Asia-Pacific region and the United States. The general pessimism on world markets provoked investors' concern about further tightening of the monetary policy of the US Federal Reserve in the face of permanently rising inflation. In addition, investors continue to focus on the tense geopolitical situation in the world and reports of new warnings about air raids in Ukraine.
So, by the time of writing, the aggregate indicator of the leading companies in Europe, the STOXX Europe 600, had sunk by 0.96% to 386.39 points.
Meanwhile, the French CAC 40 declined by 0.57%, the German DAX lost 0.66%, and the British FTSE 100 fell by 0.78%.
At the same time, over the past five trading sessions, European stock indexes have fallen by more than 2%.
Leaders of growth and decline
The value of securities of the Swiss manufacturer of food additives and dyes Givaudan S.A. fell by 7.7%.
The quotes of the British media company Reach PLC lost 2.6% on the announcement that its CFO Simon Fuller will resign on December 31.
The market capitalization of the Swiss financial conglomerate Credit Suisse increased by 1%, despite the fact that the day before, one of the world's largest investment banks Goldman Sachs lowered the price target for its securities to 4.7 francs from 5.8 francs.
The share price of the Italian bank Banco Bpm SpA sank by 4.9%, and Unicredit – by 2.9%. Meanwhile, the quotes of Deutsche Bank and Commerzbank fell by 3.0%.
The value of securities of the Spanish group specializing in the design, construction and management of infrastructure facilities, Ferrovial SA rose by 0.5%. On Tuesday, it became known that Ferrovial has signed an agreement to sell the British business of Amey Group to a private American company One Equity.
The quotes of the energy company Echo Energy PLC increased by 4%. In the third quarter, the company made tangible progress as part of its plan to increase production and improve infrastructure.
The market capitalization of the Danish brewing corporation Carlsberg and the Dutch giant Heineken jumped by 1.0% and 0.5%, respectively.
The share price of the British manufacturer of food and household chemicals Unilever rose by 0.5%.
The value of the securities of the British tobacco company Imperial Brands gained 0.4% thanks to the announcement of a share buyback last week.
Market sentiment
The focus of attention of participants in the European stock market on Tuesday is the assessment of the risks of a recession in the global economy amid the prospect of tightening monetary policy by global central banks, primarily the US Fed.
Representatives of the Bank of England announced that the central bank has expanded the emergency bond purchase program to include inflation-linked government debt securities. The central bank announced the start of the program on September 28.
The British central bank is ready to buy inflation-linked government bonds worth of up to 5 billion pounds per day.
In addition, representatives of the central bank warned of a "significant risk to the financial stability of the country" in connection with the unfolding crisis in the UK pension funds.
Meanwhile, according to the latest data from the National Statistical Office (ONS) of the country, according to the results of the third quarter of this year, the unemployment rate in England was 3.5% against 3.8% in April-June. At the same time, analysts predicted an indicator of 3.6%.
A tangible support factor for the European stock market on Tuesday was the announcement that the German authorities changed their position in support of the issuance of debt obligations of the European Union in order to help finance the bloc's response to the gas crisis in the coming winter.
This week, European traders will be waiting for the release of statistical data on consumer prices in the United States. According to preliminary forecasts of experts, by the end of September, annual inflation in America slowed to 8.1% from August's 8.3%.
In addition, the corporate earnings reporting season for the third quarter of 2022 will begin in Europe in the coming days.
Trading results the day before
On Monday, European stock indexes closed in the red amid the tense situation in Ukraine, as well as a permanent slowdown in the global economy.
As a result, the aggregate indicator of the leading companies in Europe, the STOXX Europe 600, sank by 0.4% to 390.12 points.
Meanwhile, the French CAC 40 declined by 0.45%, the German DAX increased by a symbolic 0.05%, and the British FTSE 100 fell by 0.46%.
The value of securities of the French oil and gas company TotalEnergies SE sank by 2.1%. The company's management proposed to organize annual negotiations on employee salaries with trade unions in France ahead of the scheduled date, provided that strikes at refineries would end.
The quotes of the British online retailer THG plc fell by 9.7%.
The market capitalization of the German energy company Uniper SE decreased by 7.5%.
The share price of the Austrian manufacturer of sensors, semiconductor components and lighting equipment ams-OSRAM AG fell by 6.7%.
The value of the securities of the French automotive corporation Renault SA rose by 2.4% after the company's management confirmed that it was negotiating an alliance with Japanese Nissan about future investments in Renault's new electric vehicle business.
Quotes of the French bank Societe Generale SA fell by 0.1% on the news that the company's chief operating officer, Gaelle Olivier, will leave his post at the end of 2022 due to management reshuffles.
The market capitalization of the German real estate company Tag Immobilien and the Swedish energy company Orron Energy collapsed by more than 9%.
The share price of the British multinational packaging business DS Smith Plc soared by 12%. The company's management announced that it expects the growth of financial indicators in the current financial year above market forecasts.
The value of securities of Italian financial companies Banco BPM and Assicurazioni Generali increased by almost 2%.
On Monday, European investors expressed concern about the consequences of rocket attacks in Ukraine over the weekend. In addition, market participants analyzed possible further steps of the world central banks in the field of monetary policy.
So, on Monday morning it became known that the BoE will increase the maximum volume of daily auctions for the redemption of government bonds as part of its temporary program.
At the same time, the British central bank plans to fully complete the repurchase of government securities on Friday, October 14. Since the launch of the program, the BoE has held 8 auctions. In total, the central bank bought bonds for $ 5.5 billion, although it had previously stated that it was ready to buy securities for 40 billion pounds.
Last Friday, a stronger-than-expected labor market report was published in the United States. As a result, the September figures from the US Department of Labor increased investors' concern that the Fed will continue to raise the interest rate in an attempt to cope with record inflation.
According to the results of trading, the stock exchanges of the Asia-Pacific region collapsed sharply. At the same time, trading volumes were insignificant due to the holidays in Japan and South Korea. Thus, the Shanghai Shenzhen CSI 300 stock indicator sank by 2.21%, and the Shanghai Composite lost 1.66%.
The main factor of pressure on the Asia-Pacific exchanges on Monday was the securities of chip manufacturers. Thus, the quotes of Anji Microelectronics Tech and Chengdu Xuguang Electronics companies fell by 20% and 10%, respectively, after the White House introduced export control measures. Under the new rules, Chinese companies will no longer have access to some semiconductor materials produced on United States equipment.
Such a decisive step by the American authorities, experts suggest, could provoke a tangible deterioration in trade relations between the United States and China and have serious economic consequences if China takes retaliatory measures.
Another factor of pressure on Asian stock markets on Monday was the release of fresh data that by the end of September, the country's services sector declined amid permanent disruptions related to the consequences of the coronavirus pandemic.
