Europe close: Stocks and oil move lower ahead of ECB stress tests
European stocks ended the session deeply in the red after poor quarterly results out of US computing giant IBM and despite reports that the European Central Bank had begun to execute purchases of asset covered bonds from France and Spain.
To take note of, oil futures were again to be seen headed lower towards the end of trading.
That and the IBM results weighed on what was already dour market sentiment following weak showings out of two of the Continent’s own technology stalwarts, SAP and Royal Philips, earlier in the day.
The German software giant slashed its full-year earnings forecasts, sending its shares lower by nearly 4%. Meanwhile, Royal Philips reported weaker than expected third quarter profits and sales.
Acting as a backdrop, market commentary highlighted France’s upcoming budget battles, as well as the nervousness in some corners ahead of next weekend’s ECB stress test results.
Traders were also highly expectant ahead of tonight’s results from US technology outfits Apple and Texas Instruments.
The German Dax Xetra finished the session 1.43% lower and the Paris benchmark, the Cac-40, down by 0.98%. Stocks on the periphery fared better, with Madrid’s benchmark Ibex 35 down by just 0.29% and the FTSE Mibtel down 0.49%.
Adidas ended the day 5% higher after The Wall Street Journal Europe reported that a group of investors may make a bid for Adidas valued at about €1.7bn.
Shares of French advertising group Havas also gained ground on the back of a deal that would see billionaire Vincent Bollore take a majority stake in the firm.
From a sector standpoint the largest losses are now to be seen in the following industrial groups within the DJ Stoxx 600: Oil&Gas (-2.35%), Technology (-2.33%) and Automobiles&parts (-1.41%).
Better than expected economic data
The Eurozone’s current account surplus rose to €18.9bn in August after a reading of €18.7bn in the prior month.
Industrial orders in Italy increased by 1.5% month-on-month in August (consensus: 0.2%).
German producer prices fell at 1% year-on-year clip in September, as expected.
Oil futures move lower
Front month Brent crude futures were lower by 1.68% to $84.72 per barrel out on the ICE.
The euro/dollar edged up to 1.2780.