Europe midday: Oil and mining stocks track commodity prices lower

15th Oct 2024 08:52

(Sharecast News) - European markets were mostly lower on Tuesday morning as investors digested key economic indicators from the UK and Germany, while energy and mining stocks were dragged down by falling commodity prices.

By lunchtime in Central Europe, the Stoxx 600 was down 0.14% at 524.03, pulling back after settling at a two-week high of 524.76 the previous session. Benchmarks in Frankfurt and Madrid were higher, while stocks in London, Paris and Milan were in the red.

Nervousness ahead of this Thursday's European Central Bank policy meeting was also likely prompting investors to scale back their appetite for risk. The ECB is widely expected to cut rates by 25 basis points.

In the UK, hopes of an interest rate cut were also raised after official data showed a decline in wage growth as employers continued to cut payrolls. UK earnings growth fell from 5.1% to 4.9% in the three months to August, its lowest level for more than two years, while the unemployment rate declined unexpectedly to 4% from 4.1% the previous quarter.

Meanwhile, economic sentiment in Germany improved more than expected this month, with economists, analysts and finance professionals turning more positive on the global macro outlook. The ZEW Indicator of Economic Sentiment rose to 13.1 in October, up from an 11-month low of 3.6 in September and higher than the consensus estimate of 10.

In other news, Brent crude was down around 4.5% at $74.03 a barrel after a report claimed Israel would strike at Iranian military installations instead of its energy facilities. Oil prices have been volatile in recent weeks on concerns that an escalation of conflict could hamper supply from the oil-rich nation.

Market movers

Swedish telecom equipment maker Ericsson surged 10% as the company reported core earnings and sales above expectations, boosted by demand for its 5G equipment in North America.

UK housebuilder Bellway jumped 7% as it reported a brighter outlook with its forward order book increasing due to easing economic conditions. The news came as the company revealed a 62% slump in annual profits.

Also in London, fintech money transfer platform Wise was also 6% higher after reporting a 17% jump in second-quarter income after a strong rise in customer numbers.

Energy majors were falling sharply on the back of the significant decline in oil prices, with BP, Shell, TotalEnergies and Eni nursing heavy losses.

Mining stocks were also falling, along with copper prices, with heavyweights Glencore and Anglo American among the worst performers on the FTSE 100. Copper futures were down 1.4% at $4.34 a pound due to a strong US dollar and concerns over the Chinese economy.