European stock indices are mainly growing on Monday, with the exception of the British indicator.
The composite index of the largest enterprises in Europe Stoxx Europe 600 as of 12:20 Moscow time rose by 0.58% to 398.6 points.
German DAX adds 0.53%, French CAC 40 – 0.52%, Italian FTSE MIB – 0.44%, Spanish IBEX 35 – 0.8%.
The British FTSE 100 loses 0.35% in trading. The international rating agency Moody’s on Friday changed the outlook for the UK rating to “negative” from “stable” due to “growing unpredictability of the country’s political course in the face of deteriorating growth prospects and high inflation.”
At the same time, the agency’s experts noted the stability of the British economy, in connection with which they confirmed the country’s rating at the level of “Aa3”.
On Sunday, it became known that former British Prime Minister Boris Johnson will not fight for the post of leader of the Conservative Party and, accordingly, the head of the British government.
This gives ex-Finance Minister Rishi Sunak a good chance of winning, the Financial Times notes.
Other European markets are supported on Monday by signals that the Federal Reserve System (FRS) may slow down the pace of raising the base rate since December.
Meanwhile, business activity in the eurozone continues to weaken. The Composite Purchasing Managers’ Index (PMI), calculated by S&P Global, fell to 47.1 points in October, the lowest since November 2020, compared with 48.1 points a month earlier, according to preliminary data. An index value below 50 points indicates a decline in activity.
Manufacturing PMI in the euro area in October fell to the lowest since May 2020 46.6 points from 48.4 points a month earlier, the service sector indicator fell to 48.2 points from 48.8 points in September.
In Germany, the composite PMI fell this month to the lowest since the beginning of 2020 of 44.1 points from 45.7 points in September. Indicators of activity in the industrial sector and in the service sector of Germany fell to lows, respectively, since June and May 2020.
In France, the composite PMI fell to 50 points from 51.2 points in September, the index of activity in the industrial sector fell to its lowest level since May 2020. In the UK, the composite indicator fell to 47.2 points from 49.1 points, industrial PMI also fell to its lowest level since May.
The focus of traders this week is the reporting of companies such as HSBC, Credit Suisse, TotalEnergies (SPB: TOT), Unilever and Mercedes-Benz. A total of 118 Stoxx Europe 600 companies will release reports this week.
Shares of Philips lost 2.6% in trading on Monday. The Dutch consumer goods and medical device maker posted a net loss in the third quarter of 2022, worse than analysts’ consensus.
Philips intends to urgently take measures to reduce operating costs, including by cutting about 4,000 jobs worldwide. In addition, it plans to attract a credit line in the amount of 1 billion euros.
Credit Suisse rose 1.4%. A Swiss bank said on Monday it would pay 230 million euros to settle a long-standing case in France concerning violations in cross-border transactions.
Among the growth leaders in Germany are shares of RWE (+1.9%), E.ON (+1.5%), Deutsche Bank (+1.6%), Merck (+1.4%), in France – Engie (+1.6%), STMicroelectronics (+1.56%) L’Oreal (+1.3%).
Shares of Anglo American (-2.8%), Shell (SPB: RDS.A) (-2%), Glencore (-2%), Rio Tinto (-2%), BHP Group (-1.95) are getting cheaper in the UK %), HSBC (-1.5%).
