(Bloomberg) — European stocks fell at the start of a busy earnings week. Investors remained cautious about the health of European economies and rising tensions in the Middle East.
The Stoxx Europe 600 index fell 0.5% at 12:41 p.m. in London. Real estate and consumer products and services were the biggest laggards, while energy stocks outperformed as oil prices recovered from last week’s declines. Miners were supported by a rise in iron ore and base metals after Chinese banks cut their benchmark interest rates more than expected.
Among individual stocks, JDE Peet’s NV soared after investment holding company JAB agreed to acquire Mondelez International Inc.’s stake in the coffee retailer. Munich Re fell after receiving a downgrade and Sandvik AB fell after missing operating profit estimates. SGS SA and Intertek Group Plc were also among the worst performers on the Stoxx 600 after RBC analysts downgraded both names, citing more caution in the testing, inspection and certification sector.
Investors are attentive to the health of major economies; France has received a rating downgrade from Scope Ratings in another warning about the state of the country’s finances. Geopolitics also take center stage, with events in the Middle East, the war in Ukraine and the upcoming US election on the radar.
Last week’s disappointing results are also dampening confidence. Weak earnings from companies like ASML Holding NV will likely weigh on tech index heavyweights like SAP SE, which is due to report after the market closes today, said Joachim Klement, head of strategy, economics and ESG at Panmure Liberum. .
Adding to this view, negative earnings revisions and a weak first batch of third-quarter results suggest the rally in cyclical stocks could be losing steam, JPMorgan strategists said.
Next month’s US elections will also keep many investors on the sidelines as the outcome remains uncertain.
European business executives are more concerned than their American counterparts about Donald Trump’s promise to impose tariffs on all imports if he takes office again, and mentions of the “tariff” are more frequent in European business conference calls. than in the US.
“Overall, it seems that investors are increasingly cautious about the medium-term outlook over the next six months,” Panmure Liberum’s Klement said. “Therefore, advances in selected stocks will be used to make profits.”
For more information on the stock markets:
Do you want more news about this market? Click here to watch a curated First Word channel with actionable news from Bloomberg and select sources. You can customize it to your preferences by clicking Actions in the toolbar or pressing the HELP key for help. To subscribe to a daily list of European analyst rating changes, click here.
More stories like this are available at www.bloomberg.com
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.