Europe midday: Stocks fall for third day amid political, macro uncertainty

23rd Oct 2024 11:01

(Sharecast News) - European stocks inched lower on Wednesday though markets were rangebound with investors adopting a cautious approach amid heightened political uncertainty and ongoing price volatility in the commodity markets.

By midday CEST, the Stoxx 600 was trading 0.1% lower at 519.66. The Dax, FTSE MIB and Ibex 35 were all trading more or less flat, while the FTSE 100 fell 0.3% and the Cac 40 was down 0.4%.

The Stoxx 600 was on track to record its third straight decline since hitting a four-week high of 524.99 on Friday - its highest close since reaching a record of 528.08 on 27 September.

US stock futures were also pointing to a weak start on Wall Street, with analysts pinning the downbeat market sentiment to uncertainty surrounding the upcoming elections, with the latest polls showing that former president Donald Trump is leading in the majority of swing states.

"The prospect of a Donald Trump presidency has been a focus for investors, with Trump's policies, including tariffs and restrictions on undocumented immigration, expected to increase inflation. This, in turn, has supported the dollar on expectations that US rates may remain relatively high for a longer-than-anticipated period," said Patrick Munnelly, partner for market strategy at Tickmill Group.

Brent crude was down 1.1% at $75.20 a barrel having jumped by 2% the previous session as oil markets continue to react to the latest newsflow from the Middle East. Meanwhile, gold prices hit yet more records, rising 0.2% to a $2,765 an ounce. Bullion has now increased by more than 5% over the past two weeks despite the relative strength of the US dollar.

In the absence of any major economic data, speeches from the heads of Bank of England and European Central Bank are likely to be closely watched at the annual meetings of the IMF and World Bank taking place in Washington DC. Both Andrew Bailey and Christine Lagarde due to speak, along with policymakers from the Fed.

Comments in recent days from several Fed members have tempered expectations of continued aggressive monetary easing in the US, as policymakers call for more gradual reductions in interest rates due to the progress made in the fight against inflation.

Lloyds gains, Deutsche Bank falls

Lloyds rose in London after beating consensus forecasts with its third-quarter earnings, as the banking group reiterated guidance for the full year. Statutory profit before tax totalled £1.82bn in the three months to 30 September, down 2% on last year but well ahead of the £1.6bn expected by analysts due to lower-than-expected impairment charges.

German peer Deutsche Bank fell despite returning to profitability in the third quarter with a net profit of €1.46bn, surpassing analyst expectations of €1.05bn. Revenue for the quarter reached €7.5bn, exceeding forecasts for €7.34bn, with notable performance in its investment banking division.

Danish Brewer Carlsberg declined after the news that its £3.3bn takeover of Britvic is being formally investigated by UK competition regulators.

AkzoNobel, the Dutch maker of paints, coatings, and chemicals, fell sharply after underwhelming with third-quarter results as organic sales rose just 1% and revenues fell 3%.

UK-listed precious metals miners Fresnillo and Hochschild were both in demand after reiterating full-year production guidance following solid third-quarter output performances, while Gem Diamonds disappointed with its third-quarter update.