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European stocks higher in tight ranges; central bank speakers, earnings in focus

Published 11/09/2023, 03:08 PM
Updated 11/09/2023, 04:44 PM
© Reuters - European stock markets edged slightly higher Thursday in subdued trading, with investors looking to central bank officials for more clues as to whether global interest rates have peaked.

At 03:40 ET (08:40 GMT), the DAX index in Germany traded 0.2% higher, the CAC 40 in France traded 0.4% higher, while the FTSE 100 in the U.K. traded largely flat.

Fed’s Powell to take center stage, again

European equities have seen limited activity Thursday, as investors attempt to decide whether the recent rally was based on solid ground.

Jerome Powell is set to take centre stage once more, with the Fed chair scheduled to speak at another conference later Thursday having offered few cues on monetary policy at a seminar on Wednesday.

He’s not the only major player speaking today though, with Philip Lane, the European Central Bank’s chief economist, and Bank of England Chief Economist Huw Pill both set to comment at separate events.

Confidence has returned to global equity markets, largely based on the hope that the recent pausing in rate-hiking cycles by the Fed, the ECB and the Bank of England suggests that these major central banks are more likely to ease monetary policy as a next move than tighten.

China back in disinflation territory

There is a dearth of economic data to digest in Europe Thursday, but the news out of China, a major export market for Europe’s largest companies, wasn’t encouraging.

Government data showed on Thursday that both consumer and producer inflation shrank in October, putting the country in disinflation territory for the second time this year. 

The inflation data also came on the heels of disappointing trade figures for October, while readings last week had shown sustained weakness in Chinese business activity through the month.

Earnings deluge continues

Turning to the corporate sector, AstraZeneca (LON:AZN) stock rose 2% after the drugmaker raised its annual earnings forecast, helped by strong demand for its cancer drugs, and reported third-quarter profit and revenue just ahead of expectations.

ArcelorMittal (AS:MT) stock fell 1.7% after the world's second-largest steelmaker reported a drop in third-quarter profit fell as steel prices declined in key markets, but stated that it remained positive on the medium-to-long-term steel demand outlook.

Henkel (ETR:HNKG) stock rose over 3% after the German consumer goods company slightly raised its guidance for the year, with strong pricing helping third-quarter growth.

Wizz Air (LON:WIZZ) stock fell almost 8% after the low-cost carrier narrowed its annual profit forecast, citing continuing macroeconomic uncertainty and difficult operating conditions.

Flutter Entertainment (LON:FLTRF) stock slumped over 10% after the world's largest online betting company forecast full-year earnings to be at the bottom of its previously forecast range.

Crude edges higher, but demand concerns remain

Oil prices edged higher Thursday, attempting to recover from their lowest levels in more than three months although worries of waning demand in China and the U.S., the two biggest economies in the world, remain.

Data released earlier Thursday showed that China, the world's biggest oil importer, fell back into disinflationary territory in October. 

This followed the American Petroleum Institute, an industry body, stating that U.S. crude oil stocks rose by almost 12 million barrels last week. If confirmed by official data, that would be the biggest build since February. 

By 03:40 ET, the U.S. crude futures traded 0.7% higher at $75.88 a barrel, while the Brent contract climbed 0.8% to $80.16 a barrel . Both benchmarks hit their lowest since mid-July on Wednesday.

Additionally, gold futures fell 0.2% to $1,953.65/oz, while EUR/USD traded largely unchanged at 1.0706.


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