PARIS/LONDON (dpa-AFX) – Europe’s stock exchanges benefited from the friendly US stock market on Friday, as they had the day before. In its tow, the EuroStoxx 50 (EURO STOXX 50) contained its severe loss significantly – in the end there was still a minus of 0.46 percent to 3476.63 points. On a weekly basis, the leading index recorded the euro zone a clear gain of 2.8 percent. In Paris on Friday, the CAC 40 fell 0.85 percent to 6035.39 points, while London’s FTSE 100 closed 0.37 percent higher at 6969.73 points.
The development of bond yields continues to set the direction for the stock exchanges – on both sides of the Atlantic. On Friday, the much-watched 10-year Treasury yield temporarily climbed to 4.33 percent, its highest level since 2007, but then bounced back somewhat. High yields on fixed income securities such as bonds, as well as rising interest rates, reduce the relative attractiveness of stocks.
The continued yield lift suggests that investors will continue to tighten with a monetary policy calculate. The US Federal Reserve has been fighting high inflation for some time by raising its key interest rate by a total of three percentage points this year.
Most other major central banks are now following the Fed’s example – including the European Central Bank (ECB). Despite the economic weakness in the common currency area, the general expectation on the market is that the ECB will continue to fight against the high inflation when it decides on interest rates next Thursday. On average, analysts expect key interest rates to rise by 0.75 percent to 1.5 percent. There are also indications of a further hike in December, added analyst Greg Fuzesi from the US bank JPMorgan.
Accordingly, things are looking poor on the stock markets worldwide: Despite the recent recovery, most important indices have recorded double-digit percentage losses since the beginning of the year.
Against this background, interest-sensitive retail, real estate and construction stocks recorded significant daily losses: their sub-indices >CH0019112553> in the broad Stoxx Europe 600 lost between 1.8 and 3.3 percent.
The construction value index also suffered from the five percent price loss of the Swiss construction chemicals company Sika. With the figures presented in the morning for the course of business in the first nine months, Sika had indeed met the sales expectations, but the profit figures lagged behind. The influence of the higher raw material prices weighed more heavily than expected.
After disappointing industry news, the index of consumer goods manufacturers was also one of the biggest losers in the Stoxx Europe 600 with minus 1.7 percent. After good figures from some competitors, adidas, Kering and L’Oreal (LOréal) were disappointing at the end of the week.
The shares of the EuroStoxx 50 heavyweight L’Oreal lost 5.8 percent, although quarterly sales were better than expected at first glance. But the hair in the soup was, for example, the comparatively weak growth in Asia.
The luxury goods group Kering also has a problem there. He continues to wrestle with the consequences of the strict corona measures in China. Therefore, the turnover of the Italian fashion brand Gucci, which belongs to the company, did not grow as strongly as experts expected in the third quarter, even if the situation improved somewhat compared to the second quarter. The stock fell 3.3 percent. The bottom of the EuroStoxx 50 was the German sporting goods manufacturer Adidas. After the forecast was cut again, the share price fell by almost ten percent to its lowest level since spring 2016.
Even decent numbers were not appreciated by investors. Renault (Renault) stocks edged up even as the automaker benefited from price hikes and boosted sales significantly in the third quarter. Meanwhile, the sector was weighed down by negative news from the world’s largest manufacturer Toyota (Toyota Motor). The company can no longer avoid cutting its production forecast for the year due to a lack of electronic chips. The Japanese have had to adjust monthly production several times in recent months, but have so far retained the annual target.
The titles of the eyewear group EssilorLuxottica lost three and a half percent despite a surprisingly significant increase in sales./gl/ngu