FX.co ★ European stock market falls again

The key stock exchange indicators of Western Europe showed a decline on Tuesday after a strong growth the day before. Market participants continue to analyze quarterly and semi-annual reports of large European companies, and are also waiting for the release of statistics on annual inflation in the United States.

So, by the time of writing, the aggregate indicator of the leading companies in Europe, the STOXX Europe 600, fell by 0.24% to 437.87 points.

The highest results among the components of the STOXX Europe 600 are shown by the securities of the Swiss retailer Dufry AG (+3.4%) and the German software developer TeamViewer AG (+3.0%).

At the same time, the shares of the British company AWG Plc (-18.0%), which provides office rental services, and the Swiss online pharmacy chain Zur Rose Group AG (-11.0%) lead the list of the fall.

The French CAC 40 sank by 0.21%, the German DAX declined by 0.58%, and the British FTSE 100 symbolically increased by 0.01%.

Growth and Fall Leaders

The value of securities of the German reinsurance company Muenchener Rueckversicherungs-Gesellschaft AG increased by 0.7%. In the second quarter of fiscal year 2022, the company reduced its net profit by 31%, but confirmed the annual forecast for the indicator at the level of 3.3 billion euros.

The quotes of the Czech developer of antivirus software for computers Avast PLC rose by 0.2%. In January-June, the company reduced pre-tax profit by 35%, but increased average revenue per customer by 2.2%.

The market capitalization of the British hotel chain operator InterContinental Hotels Group Plc decreased by 2%, despite the fact that in the first half of 2022 the company significantly increased its net profit, announced a new securities buyback program of up to $500 million, and also resumed the payment of interim dividends.

The share price of the British investment company Abrdn PLC fell by 3.3%. In the first half of the year, the company increased its pre-tax loss and significantly reduced revenue.

The value of securities of the Swiss duty-free goods company Dufry AG soared by 3.4% on the background of a report on high sales dynamics in July. In addition, in January-June, the company's turnover more than doubled.

What's Going on in the Market Right Now?

The current focus of European stock market participants is the exciting expectation of another increase in the base rate by the US Federal Reserve amid the release of data on the US labor market. The fact that strong data could become a catalyst for an aggressive increase in interest rates by the central bank of the country was also recently told by market experts.

So, on Friday, the US Department of Labor reported that in July the unemployment rate in the United States fell to 3.5% from 3.6% in June. At the same time, the number of Americans employed in non-agricultural sectors of the economy grew twice as much as preliminary market forecasts - by 528,000.

This week, investors will analyze data on inflation in the United States. Release of this information is scheduled for Wednesday.

According to preliminary scenarios of economists, in July the annual inflation rate in the country fell to 8.7% from 9.1% in June (the highest since 1981).

At the end of the week, UK gross domestic product data for June and the second quarter of 2022 will also be released.

Recall that on Thursday, representatives of the Bank of England warned about the prospects for the UK economy to enter a long period of recession in the fourth quarter of 2022.

In addition, a day before the BoE raised the key interest rate by 50 basis points - up to 1.75% from 1.25% per annum in the fight against record inflation. The August rate hike by the central bank turned out to be the sixth in a row, and the pace of its increase was a record since 1995.

In addition, market participants are analyzing the prospects for an escalation of geopolitical tensions between the two world economic superpowers - China and the United States. On Tuesday morning, Taiwan's foreign minister said China was using military exercises as a pretext to prepare to invade the island.

Additional concern for European investors is also caused by the rapid development of the conflict in Ukraine. The day before, the largest nuclear power plant in Europe was shelled there.

Trading Results on the Eve

European stock exchange indicators showed an increase amid growing investor demand for risky assets on Tuesday, caused by strong data on the US labor market. In addition, market participants analyzed the positive reports of companies in the euroregion.

As a result, the aggregate indicator of the leading companies in Europe, the STOXX Europe 600, rose by 0.74% to 438.93 points.

The highest results among the components of the STOXX Europe 600 were shown by the shares of the British oil and gas exploration and production company Orron Energy AB (+8.3%). At the same time, the shares of the British media company Future Plc (+5.2%) topped the drop list here.

The French CAC 40 rose 0.8%, the German DAX increased 0.84%, and the British FTSE 100 gained 0.57%.

The value of securities of the British financial services provider Hargreaves Lansdown soared by 7.2%. The day before, economists from Deutsche Bank significantly increased the value benchmark of the financial company's shares.

The market capitalization of the French utility operator Veolia Environnement SA increased by 2.0%. Earlier, the company confirmed information about the sale of the British division of Suez Recycling and Recovery UK Group, engaged in waste recycling, to the Australian investment bank Macquarie Asset Management for $2.4 billion.

The share prices of the German supplier of equipment for the energy industry Siemens Energy AG decreased by 1%. On Monday, the company's management reported an increase in net loss in the third quarter of fiscal year 2022 and expenses of $204 million related to business restructuring in Russia.

The value of securities of the Danish brewing concern Carlsberg increased by 1.3%. The company has improved its forecast for operating profit for 2022 due to sales growth in Asia and Europe.