European stock indexes are down Thursday after the U.S. central bank’s decision to tighten monetary policy (monetary policy). Investors also expect interest rates to rise in the eurozone and are assessing issuers’ quarterly reports.
The Stoxx Europe 600 composite index of the region’s largest companies was down 0.52 percent at 460.1 points as of 11:55 a.m.
The British indicator FTSE 100 was losing 0.51% during the session, German DAX – 0.36%, French CAC 40 – 0.46%, Italian FTSE MIB – 0.71%, Spanish IBEX 35 – 0.58%.
The day before, the U.S. Federal Reserve (Fed) raised its interest rate on federal funds rate by 25 basis points, now its range is 5-5.25% per year. In addition, the words about the necessity of further tightening of MP, which were present in the document published at the end of the March meeting, disappeared from the press release on the results of the meeting.
The European Central Bank (ECB) is also likely to raise rates, Trading Economics said. The results of its May meeting will be published on Thursday at 15:15 Moscow time.
In addition, concerns about the banking sector are growing. PacWest Bancorp said it is in talks with partners and potential investors looking at different options for its business. Earlier, the media reported on the U.S. financier’s plans to sell the business, which triggered a more than 50% drop in its share price in Wednesday’s additional trading.
In France, shares of outsourcing Teleperformance (-4%), retailer Carrefour (-2.3%), cosmetics maker L’Oreal (-2.1%) and steelmaker ArcelorMittal (-1.7%) are among the leaders of the decline.
Papers of aerospace company Airbus SE fell in price by 1.1%. The European company in the first quarter recorded a 2% drop in revenue and net profit fell to 466 million euros from 1.22 billion euros a year earlier.
Shares of German Volkswagen AG fell 0.1%. The auto concern in the first quarter of 2023 significantly increased revenue, but reduced operating profit by 31%.
The capitalization of the Swedish Volvo Car falls by 3.8%. The company reported layoffs of 1,300 office workers in Sweden, or about 6% of its workforce in the country.
Another automaker, Bayerische Motoren Werke AG (SPB: BMW), is adding 2.2% in market value. The company approved a stock buyback of up to 2 billion euros, even though pre-tax earnings in the first quarter more than halved.
Mercedes-Benz Group AG common stock and Porsche Automobil Holding SE preferred stock added 2.4% and 1%, respectively.
Oil and gas company Shell (SPB: RDS.A) is up 2.3%. The British-Dutch company boosted its January-March net income by 22% year-over-year and plans to buy back its own shares for $4 billion before its second-quarter earnings release.
Shares of rival TotalEnergies (SPB: TOT) are up 1.3% and BP plc (SPB: BP) are down 0.4%.
Anheuser-Busch InBev (SPB: BUD) (AB InBev) brewery increased its net profit 17 times in the first quarter. Its market value is up 0.1%.
