FX.co ★ European stock market falls on alarming news from the UK

On Wednesday, the leading stock indicators of Western Europe showed a decrease amid the release of fresh statistics on consumer prices in the UK. In addition, investors continue to analyze corporate reporting from key European companies.

Thus, at the time of writing, the composite index of the leading European companies STOXX Europe 600 fell by 0.64% to 431.64 points.

The French CAC 40 fell 0.07%, the UK FTSE 100 rose 0.13% and the German DAX shed 0.24%

Rising and falling

British internet food delivery company Deliveroo Plc tumbled 3.1% on news it was winding up operations in Australia due to strong competition in the local market.

Quotes of the French concern Alstom SA rose by 1.3%. In the first half of fiscal year 2022, the company reduced its net loss, increased revenue and recorded an increase in order volume.

The market capitalization of the British insurer Beazley Plc collapsed by 5.4%. The day before, the company's management spoke about plans to raise $457 million by selling new securities.

The share price of German energy equipment maker Siemens Energy soared 4.6% on a report that the company would not pay dividends for the current year on the back of a quarterly net loss. At the same time, weak financial results for July-September were attributed by Siemens management to high costs associated with the restructuring of the division in Russia, as well as problems in the wind turbine division of Siemens Gamesa.

British cruise operator Carnival Plc plunged 12%. The day before, the company announced that it plans to place convertible debt securities in the amount of $1 billion.

Quotes of the British outsourcing company Sage Group soared by 6%. In the past fiscal year, the company reduced its pre-tax profit, but recorded an increase in revenue.

The market capitalization of US-Irish consumer credit data analytics and reporting company Experian increased 0.4% on a higher-than-expected first-half earnings report.

British food maker Premier Foods gained 0.7% on the back of higher half-year adjusted earnings.

The value of British property developer British Land sank 2%. The day before, the company reported a drop in the value of its facilities due to the pessimistic economic outlook that put pressure on the British property market.

Market sentiment

On Wednesday, European investors analyzed the latest data on consumer prices in England. Thus, according to the information of the National Statistical Office of Great Britain, following the results of the past month, annual inflation in the country accelerated to 11.1%, which was a record since 1981. In September, this figure was 10.1%.

By the way, economists predicted an increase in consumer prices only up to 10.7%. Experts cited rising electricity bills and food prices as the key reason for accelerating inflation in the UK.

Treasury Secretary Jeremy Hunt is scheduled to speak in England on Thursday and is expected to announce tax hikes and spending cuts to curb rising prices and fill a £60bn public finance gap.

On Wednesday, participants in the European stock market are also analyzing geopolitical risks. So, on Tuesday evening in the world media there were reports of rocket attacks by Russia on the territory of Poland. The Russian Ministry of Defense denied this information, saying that the military from the Russian Federation did not strike at the settlements located near the Ukrainian-Polish border. A fired rocket is known to have killed two people in a Polish village near the border with Ukraine.

Meanwhile, United States President Joe Biden said that America and its NATO allies are investigating the circumstances of the explosion, while admitting that the missile could not have been fired from Russia.

Trading results the day before

On Tuesday, the leading exchange indicators of Western Europe closed in the green zone (with the exception of the British FTSE 100) against the background of the publication of fresh statistical data for the region.

As a result, the composite index of leading European companies STOXX Europe 600 grew by 0.37% to 434.44 points.

The French CAC 40 rose 0.49%, the UK FTSE 100 sank 0.21% and the German DAX advanced 0.46%.

The value of securities of the German energy company Uniper SE rose by 6.5%.

Quotes of the British company Centrica, engaged in the storage and supply of gas, jumped by 3.6%.

The market capitalization of French aerospace and defense electronics manufacturer Thales SA increased by 4.3%.

The share price of the Spanish financial company Banco de Sabadell SA rose by 3%.

The value of securities of the British military industrial company BAE Systems rose by 1.7% due to strong operating performance since the beginning of the second half of the year against the backdrop of a weaker pound sterling. In addition, the management of BAE Systems confirmed its forecast until the end of this year, according to which it plans to increase revenue by 2-4%.

Quotes of the German manufacturer of military equipment and weapons Rheinmetall AG soared by 2.2%.

The market capitalization of the British mobile operator Vodafone Group decreased by 7.9%. In April-September, the company's adjusted EBITDA decreased by 4.4%. In addition, Vodafone's management downgraded its free cash flow forecast until the end of this year and said it expects earnings to be in the lower end of the range.

The share price of Swiss lender Credit Suisse fell 0.5% amid a global business restructuring.

The value of securities of the French outsourcing company Teleperformance SE soared by 10%.

Quotes of the Dutch global investment group Prosus N.V. jumped by 7.1%.

On Tuesday, European investors analyzed the latest data on the region. Thus, according to an interim assessment of experts, in the past quarter, the gross domestic product of 19 eurozone countries increased by 2.1% in annual terms and by 0.2% in quarterly terms.

Meanwhile, in September, the deficit of the foreign trade balance of the states of the Euroregion sank to 34.4 billion euros from 50.9 billion euros in August. At the same time, analysts predicted 44.5 billion euros.

This month, the indicator of investor confidence in the German economy rose to -36.7 points from -59.2 points in October. Experts expected it at -50 points.

According to the final data of the National Statistical Office of France Insee, in the past month, consumer prices (CPI) in the country increased by 7.1% in annual terms, which coincided with preliminary data and experts' forecasts. Recall that in September, the inflation rate in France amounted to 6.2%. At the same time, in the third quarter, unemployment in the country again fell to the lowest level in the last 14 years.

Meanwhile, the pace of growth in consumer prices in Spain in annual terms in October fell to 7.3% from September's 8.9%. Falling inflation in the country, analysts have recorded for the third month in a row.

At the end of September, the unemployment rate in the UK fell to 3.6% from 3.8% in August. At the same time, the level of average earnings of the British increased by 5.7% per month.