European stock indexes are declining at Wednesday's trading after a spectacular rise a day earlier.
The aggregate indicator of the leading companies in the STOXX Europe 600 lost 0.73%, dropping to 458.73 points at one point. The growth list among the index components was headed by securities of the British-Russian metallurgical company Polymetal International PLC (+14.6%), as well as Norwegian energy Equinor (+5.4%) and engineering Aker (+5.1%).
The German DAX indicator lost 1.34%, dropping to the level of 146252.97 points, and the French CAC 40 fell by 1.03% to the level of 6722.19 points. The Italian FTSE MIB and the Spanish IBEX 35 declined by 0.75% and 0.81%, respectively, and only the British FTSE 100 symbolically increased by 0.04% due to an increase in the global oil price.
The sharpest decline was shown by securities of companies with a significant presence in Russia. Thus, the shares of the French financial conglomerates Societe Generale and BNP Paribas sank by 3.2% and 2.5%, respectively, and the quotes of the Renault carmaker fell by 4.7%.
The share price of the largest Swiss financial holding company UBS Group AG decreased by 0.7%. Even the buyback program of up to $6 billion announced the day before, which is scheduled to begin on Thursday, could not save the securities from falling.
The capitalization of the French energy giant TotalEnergies, British Petroleum and Shell increased by 2.5%, 1.7% and 2.8%, respectively, due to a sharp increase in oil prices by 2%.
The main reason for the negative dynamics of the European stock market on Wednesday, experts call the lack of important positive news in the Russian-Ukrainian negotiations. By the way, since the beginning of this week, stock indexes have shown a permanent increase. So, since Monday, the British FTSE 100 gained 0.8%, the French CAC 40 – 2.7%, and the German DAX - 2.3%.
Meanwhile, this month the inflation rate in Spain soared to 9.8% from 7.6% in February. The resulting figure has become a record since 1985. At the same time, experts predicted an increase of only up to 8%.
According to preliminary data, in March, the consumer confidence index in Sweden collapsed to the lows of thirteen years ago: to 73.5 points from February 89 points.
The main impetus for the growth of the European stock market on Tuesday was the results of the Istanbul talks between Russia and Ukraine. According to Russian statesman and politician Vladimir Medinsky, the Kremlin plans to de-escalate the current conflict and consider Ukraine's proposals. In addition, Medinsky said that a meeting between Russian President Vladimir Putin and Ukrainian counterpart Vladimir Zelensky is possible simultaneously with the preliminary signing of a peace treaty by the heads of the Ministries of Foreign Affairs of the two states.
At the same time, Deputy Minister of Defense of Russia Alexander Fomin announced a reduction in military activity in the Kiev and Chernihiv directions. However, later the Pentagon reported that Russia was withdrawing troops from Kiev, but was increasing its presence in other locations in Ukraine.
Geopolitical tensions in eastern Europe, which began more than a month ago, have put serious negative pressure on stock markets. In addition, analysts are confident that the Russian-Ukrainian conflict will slow down the growth of the world economy, provoke increased inflation and shortages of products and raw materials in some states.
As a result, on Tuesday, the composite indicator of the leading companies of the STOXX Europe 600 euroregion increased by 1.74% to 462.09 points.
The highest results among the components of the indicator were reported by securities of the British-Russian metallurgical company Polymetal International PLC (+40%), the Italian manufacturer of automotive components Faurecia SE (+17.3%) and the operator of the food delivery service Delivery Hero SE (+15.8%). The list of declines here was led by shares of the Swedish company Boliden (-8.7%), as well as Norwegian Norsk Hydro (-6.7%) and Equinor (-5.1%).
The day before, the German DAX indicator soared by 2.79% to a five–week high, the French CAC 40 increased by 3%, the Italian FTSE MIB and the Spanish IBEX 35 rose by 2.41% and 2.98%, respectively, and the British FTSE 100 gained 0.86%.