by Diana Mandia
(Reuters) – European stock markets ended lower on Friday as concerns about the health of regional American banks prompted investors to shy away from risk.
In Paris, the CAC 40 lost 0.18% to 8,174.20 points. In Frankfurt, the Dax fell 1.76% and in London, the FTSE 100 fell 0.86%.
The EuroStoxx 50 index ended down 0.77%, the FTSEurofirst 300 fell 0.91% and the Stoxx 600 lost 0.91%.
The European benchmark index gained 0.41% during the week, while the CAC 40 recorded a weekly gain of 3.2%, helped by the easing of political tensions in France.
The American regional bank Zions Bancorporation announced Thursday unexpected losses in its division in California, while Western Alliance said it had taken legal action against one of its borrowers, accusing him of fraud, which caused a debacle in the sector on Wall Street, which had nevertheless welcomed the good results of its big names at the start of the week.
Fears about the health of the American banking system spread to Asia on Friday, then to Europe, where the European banking sector fell by 2.42% on Friday. In France, BNP Paribas, Crédit Agricole and Société Générale fell between 2.4% and 5%, among the biggest declines in the CAC 40, while elsewhere in Europe, Deutsche Bank and Barclays fell 6% and 5.6% respectively.
However, some regional American banks published rather positive results on Friday before the opening of the New York Stock Exchange, which helped to calm American stocks.
The trade front also offers some respite, since US President Donald Trump said on Friday that the plan to impose 100% customs duties on products from China, which he himself had mentioned at the end of last week, would not be tenable.
The White House tenant also announced that he would meet his Chinese counterpart, Xi Jinping, in two weeks, a meeting that he had called into question due to trade tensions.
VALUES
In Madrid, the upheavals in the local banking sector mattered more than the news from American banks. BBVA shares rose 5.9% after the Spanish bank announced the immediate resumption of its share buybacks following the failure of its efforts to convince shareholders of Sabadell (-6.7%), its smaller rival, to support its hostile takeover bid.
On the results front, EssilorLuxottica was a big support for the CAC 40 on Friday, rising 12.9% after reporting on Thursday evening a turnover up 11.7% in the third quarter, in a context of strong demand for products such as smart glasses that the Franco-Italian optical group is developing with Meta.
Shares of Danish weight-loss drug maker Novo Nordisk lost 6.3% after US President Donald Trump said on Thursday the price of its treatment would fall.
The European defense sector (-3.51%) was also penalized on Friday after American President Donald Trump and Russian President Vladimir Putin agreed to organize a new summit on the war in Ukraine. Thales and Safran lost 3.3% and 1.9% respectively.
A WALL STREET
The New York Stock Exchange moved in disjointed order on Friday, shared between fears regarding the health of regional American banks and commercial hopes.
At closing time in Europe, the Dow Jones gained 0.41%, the Standard & Poor’s 500 0.20% and the Nasdaq Composite fell 0.02%.
TODAY’S INDICATORS
Inflation in the euro zone rose to 2.2% in September, final data published by Eurostat on Friday showed, which should reinforce bets that the European Central Bank (ECB) interest rates will remain at their current level for some time.
CHANGES
The dollar gained 0.10% against a basket of benchmark currencies, but it is heading for its worst weekly performance since July, as trade tensions and signs of risks for regional US banks have pushed investors towards safe-haven currencies such as the Swiss franc and the yen.
The euro lost 0.13% to 1.1672 dollars.
RATE
Long-term bond yields in the euro zone ended the session slightly higher, after US President Donald Trump confirmed that his meeting with Chinese President Xi Jinping was maintained, and after reaching their lowest level in several months at the start of the day.
The ten-year German Bund yield rose 0.7 basis points to 2.5768%. The two-year fell 0.9 basis points to 1.9135%.
Over the week, however, German bond yields recorded a fourth consecutive weekly decline, as investors sought safe havens in a context marked by concerns linked to the closure of the American federal administration, the resurgence of trade tensions and signs of tension in the American banking sector.
In the United States, the yield on ten-year Treasuries increased by 2.5 basis points to 4.0011%. The two-year gained 3.1 basis points to 3.4574%.
OIL
Oil prices stabilized on Friday, while posting a weekly loss on concerns of an oversupply and as U.S. President Donald Trump and his Russian counterpart Vladimir Putin prepare to meet again to discuss Ukraine.
Brent rose 0.1% to $61.11 per barrel and American light crude (West Texas Intermediate, WTI) was stable at $57.46.
METALS
The price of gold hit a new high of $4,378.69 an ounce on Friday, but then retreated under pressure from a stronger dollar and comments from US President Donald Trump that 100% tariffs on China would be unsustainable.
It moved to $4.251 per ounce around 3:40 p.m. GMT.
(Some data may have a slight lag)
(Writing by Diana Mandiá, editing by Kate Entringer)
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I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
