Europe’s main stock index fell 1 per cent to its lowest in over a month on Wednesday (Oct 30), as technology and mining stocks led a broader market decline in the aftermath of disappointing corporate earnings and some key economic data.
The pan-European Stoxx 600 closed 1.3 per cent lower, having hit its lowest level since mid-September during the day, on track for its worst monthly performance in a year.
Benchmark indices on the major regional bourses including those of Germany, France, Spain and Italy dropped 0.7 per cent to 1.2 per cent.
The tech sector, which includes chipmakers, fell over 2 per cent, with analysts noting negative read-across from downbeat forecasts by Belgium’s largest semiconductor-supplier Melexis and US chip firms Qorvo and AMD.
Shares in French IT consulting group Capgemini fell 6 per cent after cutting its 2024 revenue forecast for the second time this year.
The basic resources sector snapped a three-day winning streak, with Anglo American shedding 4 per cent after BHP’s chairman said the company has moved on from acquiring the British miner.
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UBS Group’s shares dropped 4.5 per cent as investors focused on uncertainty about regulatory changes, the broader outlook and how much spare capital the bank would have going into next year.
This, coupled with a 2.5 per cent fall in Amundi following the asset manager’s expectations of a higher-than-previously-expected tax surcharge, dragged the financial services index 2 per cent lower.
Meanwhile, the eurozone economy grew faster than expected last quarter, but the outlook was weak on threats of oversized tariffs from a potential Trump presidency in the US, escalating trade tensions with China and muted consumer confidence.
The biggest surprise came from Germany’s third-quarter gross domestic product data which showed Europe’s largest economy unexpectedly skirted a recession, but inflation rose more than expected in October.
“Overall, we see little in these data to support market expectations for a 50 basis points rate cut in December… Our forecast remains for a 25 basis points cut,” said Pantheon Macroeconomics’ chief euro zone economist Claus Vistesen.
The ECB cut interest rates by 25 basis points earlier this month, acknowledging slowing inflation and a worsening economic outlook.
The neck-and-neck race between Kamala Harris and Donald Trump ahead of the US presidential election on Nov 5 also kept investors on their toes.
Back on the earnings front, Campari slumped 19 per cent after the Italian spirits group significantly missed third-quarter earnings expectations.
Chip-making equipment supplier ASM International jumped 5.4 per cent after raising its 2025 forecast range, while Standard Chartered rose 4 per cent after the lender’s third-quarter profit more than doubled year on year.
Swiss industrial company Georg Fischer jumped 16 per cent on plans to sell its machining solutions business to United Grinding Group. REUTERS
