FX.co ★ European stocks decline due to EU residents's anxiety

On Tuesday, the key European stock indices declined amid overall pessimism due to the deteriorating financial situation of the EU citizens. In addition, investors continue to analyze the corporate earnings reports for the third quarter of 2022 from key European companies.

At the time of writing, the composite index of Europe's leading companies STOXX Europe 600 fell by 0.22% to 417.41 points.

The French CAC 40 fell by 0.19%, the British FTSE 100 lost 0.25%, and only the German DAX gained 0.28%.

Top gainers and losers

The stocks of British construction company Persimmon sank by 8%. Earlier, its management said that it expected a significant decline in sales in 2023 due to permanently rising inflation and a coming recession.

The stocks of German pharmaceutical concern Bayer AG fell by 0.8%. In the third quarter of fiscal 2022, the company increased its net profit by 6.4 times and confirmed its forecast for 2022. At the same time, the final profit of Bayer AG was worse than analysts had previously expected.

The market capitalization of Swedish carmaker Volvo Car dropped by 0.3%.

The stocks of French carmaker Renault fell by 4.3%. Earlier, the company announced plans to increase its operating margin to more than 10% by 2030 and restore dividend payments in 2023 by separating its electric car business into a separate division.

The stocks of Associated British Foods Plc (AB Foods) rose by 3.4%. The retailer grew its operating profit by 42% in 2020-2021. In addition, AB Foods' management announced the start of a £500 million ($576 million) share buyback program as well as an 8% increase in dividends.

The stocks of Danish jewelry Pandora soared by 8.3% amid the increase in net earnings to 734 million Danish kroner in July-September compared with 635 million Danish kroner in the same period of 2021. The jewelry chain's revenue rose by 11% to 5.26 billion kroner. Moreover, the company reaffirmed its financial outlook until the end of 2022.

The market capitalization of German reinsurer Munich Reinsurance jumped by 1.6% thanks to a significant increase in net income in the third quarter of fiscal 2022.

Market sentiment

Bloomberg, the global news agency, reported on Tuesday that more than a quarter of local households in the UK were facing financial difficulties, according to surveys. The final result was twice as much as a year earlier. UK residents believed high food prices and rising mortgage payments are the key reasons for the current financial difficulties.

Meanwhile, according to the British Retail Consortium (BRC), retail sales in the UK surged by 1.2% last month compared to October 2021. The pace of increase dropped from a 1.8% jump in September as local consumers struggled with rising costs of living.

On Thursday, stock market participants expected the release of data on retail sales in the eurozone for September. According to experts' preliminary forecasts, the figure will increase by 0.4% month-on-month and decline by 1.3% in annual terms.

European investors also closely followed the news from the US. On Tuesday, the midterm elections to Congress began in the country. Analysts assume the Republicans could get control of the House of Representatives and the Senate which in turn could trigger cuts in budget spending.

On Thursday, the US will release up-to-date data on inflation in the country.