European stocks fall as Bank of England buoyancy fades; Stoxx 600 down 1.6%

European stocks fall as Bank of England buoyancy fades;  Stoxx 600 down 1.6%
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Economic sentiment in the eurozone continues to deteriorate

The European Commission’s Business Indicator, which combines surveys of business and consumer confidence, fell to 93.7 in September from 97.3 in August, the lowest level since November 2020.

Confidence plummeted across all sectors of the economy on a broad rise in inflation expectations, despite the European Central Bank’s pledge to raise interest rates to curb rising prices.

-Elliot Smith

Porsche shares rise on Frankfurt stock exchange debut

Porsche shares rose nearly 2% above their IPO price in Thursday’s stock market debut in what is believed to be one of Europe’s biggest public offerings.

Shares of the luxury automaker initially traded at €84 at the start of the day.

Shares were trading at the top end of their range late Wednesday, taking the company’s value to 75 billion euros.

Porsche could have a 'very good' debut, says former banker

Read CNBC’s full coverage here.

– Hannah Ward-Glenton

Stocks on the move: Rational up 12%, Barratt Developments down 9%

Rational shares rose more than 12% in early trade, topping the Stoxx 600 after the German maker of combi-steamers and ovens raised its sales and earnings guidance for 2022.

At the bottom of the European blue-chip index, British property developer Barratt Developments fell more than 9%.

CNBC Pro: Analyst says this FAANG stock is a perennial favorite — and investors should buy the drop

Tech stocks have had a rough year so far, but a Rosenblatt Securities analyst believes the sell-off is an opportunity for long-term investors to buy the drop.

“Stay away from the losers,” he said, recommending “winners in the various secular battles and evolutionary battles” in engineering.

Pro subscribers can read more.

– Zavier Ong

Stocks could continue this “oversold run” for the next few days, says Wells Fargo’s Harvey

Wells Fargo’s Chris Harvey expects the shares to continue their upward movement.

“The rise in near-term interest, the distortion in retail sales and the action of BOE all suggest that stocks will continue their oversold run for the next several days,” he said in a note to clients on Wednesday.

Stocks hit fresh lows earlier in the week, with the S&P 500 marking a new bear market. The sell-off was prompted by the Fed’s latest interest rate decision last week, which some investors believe steered the market into oversold conditions.

With the cost of capital rising and prices hovering near record highs, the consensus is increasingly that a Fed-led recession is inevitable, Harvey said.

“We treat a recession like a car crash,” he wrote. “You never know how bad it’s going to be, but there’s almost no ‘better than expected’ outcome – so policymakers have to be careful about what they wish for.”

— Samantha Subin

10-year government bond yields have fallen the most since 2020

The yield on the benchmark 10-year Treasury note fell the most since 2020 on Wednesday, although it briefly topped 4% earlier in the session after the Bank of England announced a plan to buy bonds to stabilize the British pound.

The 10-year Treasury yield last fell 23 basis points to 3.733%, or the sharpest decline since 2020.

It hit a high of about 4.019% earlier in the day, a key level that was the highest since October 2008 before those gains were erased.

Yields and prices move in opposite directions. One basis point equals 0.01%.

European Markets: Here are the opening calls

European stocks are expected to open in negative territory on Wednesday as investors react to the latest US inflation data.

According to data from IG, the UK FTSE index is expected to open 47 points lower at 7,341, the German DAX 86 points lower at 13,106, the French CAC 40 28 points and the Italian FTSE MIB 132 points lower at 22,010.

Global markets retreated after a higher-than-expected U.S. CPI report for August, which showed prices rose 0.1% for the month and 8.3% annually in August, the Bureau of Labor Statistics reported on Tuesday, defying economists’ expectations that inflation would fall 0.1% on a monthly basis.

The core CPI, which excludes volatile food and energy costs, is up 0.6% since July and 6.3% since August 2021.

UK inflation figures for August are due and July euro-zone industrial production to be released.

— Holly Ellyatt

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