Stock indices of the largest countries of Western Europe at the beginning of trading on Friday demonstrate negative dynamics, including due to weak quarterly reports of companies.
In addition, investors are worried about the possibility of a deterioration in the state of the world economy against the background of aggressive actions of a number of the largest central banks to curb inflation, reports Trading Economics. The unstable political situation in Great Britain is also negative for the markets.
The composite index of the largest companies in the Stoxx Europe 600 region decreased by 1.5% and amounted to 392.81 points by 11:31 CST.
Since the opening of the market, the German DAX indicator has decreased by 1.6%, the British FTSE 100 – by 0.7%, the French CAC 40 – by 1.7%. The Italian FTSE MIB fell by 1.6%, the Spanish IBEX 35 – by 1.9%.
One of the world’s leading manufacturers of sports goods, adidas AG, for the third time since the beginning of the year, has worsened forecasts of financial indicators for 2022 due to growing stocks of unsold goods and coronavirus restrictions in China. Also, the German company presented preliminary reporting for the third quarter, according to which profit from continuing operations fell 2.7 times, mainly due to a one-time write-off due to the curtailment of operations in the Russian Federation.
Adidas shares fell in price by 8.5% and are the leader of the decline among the components of the Stoxx 600. Quotations of shares of competitors Puma and JD Sports Fashion also decrease – respectively by 5.6% and 5.3%.
The Swedish telecommunications operator Telia in July-September increased its net profit by 8% – up to 1.71 billion crowns ($151.8 million). However, the result did not justify the analysts’ expectation of 2.1 billion euros. The company’s stock price fell by 8.2%.
Quotations of Vivendi shares fall by 4.2%. French media conglomerate Vivendi SA in the third quarter increased revenue by 4.1% to 2.578 billion euros. At the same time, the revenues of the television division of Canal+ Group decreased by 3.3% – to 1.419 billion euros. It turned out to be worse than the consensus forecast.
The value of French L’Oreal, one of the world’s largest cosmetics manufacturers, and Kering SA, which owns well-known fashion brands, decreased by 4.3% and 4.4%, respectively, despite good reporting for the last quarter.
Renault shares fell by 2.2%, although the French automaker also increased revenue in July-September stronger than forecast.
At the same time, the shares of the British food delivery service Deliveroo Plc added 3.2% in price. Gross transaction volume (GTV) in the third quarter increased by 8% and reached 1.7 billion pounds ($1.91 billion).
Retail sales in Great Britain in September fell by 1.4% compared to the previous month, the country’s National Statistics Office reported on Friday. Experts on average expected a decrease of only 0.5%, reports Trading Economics.
Meanwhile, the British consumer confidence index in October increased by 2 points and amounted to minus 47 points, reports GfK NOP Ltd. This is the first increase in the indicator in almost an hour. Prior to that, he had been updating record lows for several months in a row since the beginning of counting, that is, since 1974. At the same time, analysts expected further deterioration of the indicator – on average to minus 52 points.
Stock indices of Western European countries do not show a single dynamics during trading on Monday.
The composite index of the largest companies in the region Stoxx Europe 600 by 11:27 Moscow time fell by 0.11% and amounted to 389.98 points.
The British stock index FTSE 100 rose by 0.06%, while the German DAX by 0.26%, the French CAC 40 – by 0.33%. The Italian FTSE MIB was up 1.26%, while the Spanish IBEX 35 was down 0.35%.
Concerns about the state of the global economy are intensifying against the backdrop of persistently high inflation and aggressive measures by the largest central banks to contain it, writes CNBC.
The focus is on the elections in Italy.
The Democratic Party of Italy admitted defeat in early parliamentary elections held on Sunday, media reported.
After the announcement of the official results of processing 10% of the ballots in the elections, a coalition of four right-wing parties is in the lead with 44% of the vote. The best results for the party “Brothers of Italy”. This means that its leader, George Meloni, in the event that the center-right comes to power, may become the new Italian prime minister.
Democratic Vice Chair Deborah Serracchiani conceded defeat and said the Democrats were moving into opposition.
The pressure on the market is also exerted by the ongoing geopolitical tensions in connection with the ongoing referendums in a number of regions of Ukraine on joining Russia.
Meanwhile, the level of business confidence in the German economy in September fell to 84.3 points from 88.6 points in August, according to a report by the IFO research organization. The indicator is at a minimum since May 2020 and turned out to be worse than analysts’ forecast at the level of 87 points, writes Trading Economics.
Shares of the British financial company Virgin Money UK PLC are among the leaders of the fall among the components of the Stoxx Europe 600 index, losing 6.7%.
Meanwhile, the papers of the German Uniper SE, which add 23.2%, turned out to be the growth leaders.
Shares of the Swiss HVAC maker rose 8.4% as Berenberg experts improved the company’s stock recommendation and raised its price target.
The UK stock exchanges are closed due to the funeral of Queen Elizabeth II.
Investors this week will actively follow the meetings of the world’s largest central banks. The US Federal Reserve System (FRS) will announce the rate change decision on Wednesday, the Bank of Japan and the Bank of England – on Thursday. Most experts believe that the US and British regulators will again raise key rates to combat inflation that has been beating many years of records.
In addition, it is expected that meetings of the central banks of Switzerland, Sweden, Turkey and China will take place. The People’s Bank of China will announce the rate on loans to first class borrowers (LPR) for one year and five years on Tuesday.
The composite index of the largest enterprises in Europe Stoxx Europe 600 by 11:55 a.m. CST fell by 0.5%, to 406.34 points.
The French CAC 40 fell 0.9%, the German DAX – 0.4%. The Italian FTSE MIB fell 0.7%, while the Spanish IBEX 35 fell 0.2%.
Stock quotes of the automotive concern Volkswagen AG are growing by 1.2%. The company announced it could raise up to 9.39 billion euros in a listing of preferential shares in luxury sports car maker Porsche. In addition, VW signed an agreement with Porsche Automobil Holding SE to transfer 25% of the common (voting) shares. The capitalization of Porsche Automobil in the course of trading is growing by 3.1%.
Leading losses among Stoxx 600 components include Norwegian solar energy producer Scatec ASA (-7.6%), Sweden’s Orron Energy AB (-6.6%), operating in the field of renewable energy, and Norwegian gas station owner Aker BP ASA (-5.9%).
Among the leaders of the rise are the shares of the Polish video game developer CD Projekt S.A. (+4%) and the German manufacturer of military equipment Rheinmetall AG (+3.2%).
Minister of Culture and Information Policy of Ukraine Oleksandr Tkachenko does not exclude that due to low rates of vaccination in Ukraine, European countries may limit entry for Ukrainian tourists as much as possible.
“Thousands, tens of thousands of disrupted trips, as countries are quickly changing the rules for entry. And there is logic in this. Their governments care about the safety of their citizens, maintain an appropriate level of vaccination. Yesterday I came across statistics of vaccinations in the world. European indicators are about 70%. In the UAE, practically the entire population is vaccinated – 98%. In Ukraine, this figure is 18%, which is very small,” he wrote on the Telegram channel on Thursday.
The minister lamented that the pace of vaccination in Ukraine may lead to the fact that citizens will not be able to actively travel abroad.
“Remember, in February 2020, our tourists were returning home from the Chinese Wuhan, already covered by the epidemic. They were taken for observation in Novi Sanzhary. Frightened people even threw stones at buses then … Of course, Europeans will not throw stones at Ukrainian tourists. Just do not exclude that with such a rate of vaccination, we may be restricted as much as possible from entering. And the restrictions will continue until we reach at least close to the European level of vaccination,” Tkachenko said.
In this regard, the minister once again urged everyone to be vaccinated.
JSC Ukrzaliznytsia in 2020 transported more than 40 million tonnes of cargo to the countries of the European Union, 10 million tonnes of which were transportation to Poland and back.
As the Ukrzaliznytsia’s press service of said on Friday, exports to the EU countries, in particular, amounted to almost 29 million tonnes, imports almost 4 million tonnes, and transit about 7.5 million tonnes.
Poland, Slovakia, the Czech Republic, Italy and Romania are included in the top 5 EU countries in terms of cargo transportation by Ukrzaliznytsia.
Ukrzaliznytsia also noted an increase in transportations to and from Romania by 21.2%, to almost 4 million tonnes in 2020.
As reported, Ukrzaliznytsia transported in December 2020, according to recent data, 26.65 million tonnes of cargo in all routes, which is 7.4% more than the same period in 2019.
Investment of human capital in national wealth in Ukraine is much lower than in European countries, according to a report of the World Bank.
According to the World Bank’s study of the sphere of education in Ukraine, investment of human capital into national wealth in Ukraine is 34% of total national wealth. For comparison, in low-income countries this indicator is 41%, in Europe and Central Asia – 62%, and on average around the world – 64%.
The World Bank said that in Ukraine the percentage of people with higher education is more than 80%, which exceeds the figures of the EU (68%) and countries of the Organization for Economic Co-operation and Development (OECD) (74%), but the level of functional literacy among adults is behind indicators of these countries.
In addition, it is said that in Ukraine, there is a gap between education and employment, especially among young university graduates.
Other areas of concern include: unequal access to schooling, a gap in education among students in urban and rural schools, and less likely that graduates from rural schools will go to higher education (40% of graduates from rural schools compared to 70% of graduates in cities).
The World Bank said that about 50% of Ukrainians do not believe that secondary education provides everyone with the same opportunity of studying for free, and 70% believe that corruption in higher education is very common.
At the same time, according to the World Bank, Ukraine spends 6% of GDP on education, which is significantly more than in OECD countries (4.4%).
Among other things, the World Bank said that Ukraine has a too wide network of schools and universities, which is one of the reasons for the high level of expenses. There are 11 students per teacher in Ukraine, and in the OECD countries this indicator averages 13.1.
EUROPEAN COUNTRIES, HUMAN CAPITAL, INVESTMENT, NATIONAL WEALTH
