Key Points
- European stock markets increased with the gaining of DAX, CAC 40, and FTSE 100.
- Investors focused on PMI data amid concerns about eurozone growth, with pressure on the ECB to cut interest rates further.
- Strong corporate earnings: Barclays, Unilever, Hermes, and Danone stocks rose on better-than-expected results.
- Oil prices rebounded by over 1% due to escalating tensions in the Middle East.
European stock markets increased on Thursday as investors analyzed third-quarter corporate earnings reports and regional economic activity data. At 4:48 AM ET (8:49 AM GMT), the DAX in Germany rose by 168.19 or 0.87% to 19,545.81, France’s CAC 40 climbed by 64.74 or 0.86% to 7,562.22, and the U.K.’s FTSE 100 increased by 68.62 or 0.83% to 8,327.26.
A key focus for investors was the release of preliminary Purchasing Managers’ Index (PMI) data from major eurozone countries. This data provides insight into the region’s business activity and overall economic health. The eurozone economy is expected to remain in contractionary territory, raising concerns about sluggish growth and fueling speculation about further action from the European Central Bank (ECB).
The ECB has already cut interest rates three times this year, each by 25 basis points, but there is growing anticipation that the central bank could implement a larger 0.5 percentage point rate cut in December. On Wednesday, ECB President Christine Lagarde stated that the central bank must be cautious about additional easing measures. However, weak PMI data may push the ECB toward more aggressive monetary action.
Investors also turned their attention to third-quarter earnings, which played a significant role in driving market sentiment. Barclays (LON:BARC) stock rose by 9.73 or 4.09% to 247.88 after the British bank reported a sharp increase in third-quarter net profit. The bank’s investment division benefited from a surge in corporate dealmaking and trading during the period, boosting its overall earnings.
After reporting higher underlying quarterly sales, Unilever’s (LON:ULVR) stock increased by 187.00 or 4.02% to 4,840.00. Hermes International SCA (EPA:RMS) experienced a 47.00 or 2.28% rise to 2,108.00 in its stock after posting strong third-quarter sales. Danone SA (EPA:BN) reported stronger-than-expected third-quarter sales, driven by increased demand in North America, and the stock rose 1.70 or 2.66% to 65.70.
Oil prices rebounded Thursday after falling in the previous session. By early morning, Brent crude climbed 1.4% to $76.01 per barrel, while U.S. crude futures (WTI) rose 1.48% to $71.82 per barrel. Concerns about the conflict in the Middle East fueled the price recovery. Oil prices have gained nearly 4% this week, recovering from a 7% loss last week amid concerns about weaker demand from China.
