by Mara Vilcu

(Reuters) – European stock markets, except London, ended in the red on Wednesday, as investors take profits amid high valuations and the financial results season continues.

In Paris, the CAC 40 lost 0.63% to 8,206.87 points. In Frankfurt, the Dax dropped 0.71% and in London, the FTSE 100 rose 0.93%.

The EuroStoxx 50 index fell 0.85%, the FTSEurofirst 300 lost 0.26% and the Stoxx 600 lost 0.15%.

This Wednesday, investors digested financial results and economic data, while the geopolitical front also attracted attention.

Turning to financial results, Hermès said on Wednesday it was seeing signs of improvement in China, a key luxury market, after reporting 9.6% growth at constant exchange rates in its third-quarter sales, although the performance of its main leather goods division was somewhat disappointing. The stock lost 2.27%.

On the geopolitical level, after recent signs of easing of tensions between Washington and Beijing, the American president revived doubts on Tuesday by declaring that the meeting with Xi Jinping “may not take place”, thus sowing a new wind of uncertainty in an already fragile global climate.

Additionally, a planned summit between US President Donald Trump and Russian President Vladimir Putin was suspended on Tuesday as Moscow’s refusal of an immediate ceasefire in Ukraine cast a shadow over negotiation attempts.

Furthermore, as the US shutdown continues, delaying the release of key economic data, policymakers at the US Federal Reserve (Fed) could be forced to lead next week’s policy meeting without having a complete picture of the economy.

The tenant of the White House refused to meet the main Democrats until the “shutdown”, which has lasted for three weeks, has ended.

VALUES

Worldline gained more than 7% after publishing its quarterly results.

L’Oréal fell 6.70% after reporting third-quarter results below expectations the day before, with analysts citing the group’s weak performance in the United States and Latin America.

Elsewhere in Europe, Barclays rose 4.87% after announcing a share buyback and raising its outlook for the year.

Adidas lost 2.85% despite raising its annual outlook on Tuesday evening.

A WALL STREET

At closing time in Europe, the Dow Jones lost 0.24%, the Standard & Poor’s 500 0.31% and the Nasdaq Composite 0.75%.

Netflix fell 9.87% as the streaming giant revealed lower-than-expected third-quarter profit and a disappointing fourth-quarter revenue forecast.

TODAY’S INDICATORS

Consumer prices in Britain rose 3.8% year-on-year in September, according to data released on Wednesday by the Office for National Statistics (ONS), a rise identical to that of August and lower than forecasts, which could pave the way for a cut in interest rates from the Bank of England (BoE) this year.

“We continue to see value in gilts and anticipate a high probability of a further rate cut by the end of the year, although the monetary policy committee could wait until December rather than November in order to take into account the measures in the next budget,” said Peder Beck-Friis, economist at PIMCO.

CHANGES

The pound sterling falls against the euro and is up slightly against the dollar after the publication of a lower-than-expected British inflation rate in September.

The dollar lost 0.11% against a basket of reference currencies.

The euro gained 0.15% to 1.1615 dollars.

The pound sterling gained 0.02% against the dollar, but fell 0.10% against the euro.

RATE

US yields edge up after falling for two straight sessions, with the market remaining range-bound as the shutdown enters its 22nd day with no solution in sight.

The yield on ten-year Treasuries rose 0.3 basis points to 3.9665%. The two-year takes 0.4 basis points to 3.4592%.

The ten-year German Bund yield rose 1.5 basis points to 2.5660%. The two-year takes 0.6 basis points to 1.9207%.

OIL

Oil prices rose for the second day in a row on Wednesday, supported by rising energy consumption in the United States and hopes of a breakthrough in trade negotiations between the United States, China and India.

Brent rose 2.35% to $62.76 per barrel and American light crude (West Texas Intermediate, WTI) gained 2.55% to $58.70.

METALS

The price of gold is attracting investors’ attention after falling more than 5% on Tuesday. Around 3:42 p.m. GMT, the spot gold price fell 2.02% to $4,037.55 per ounce.

The precious metal, a safe haven par excellence, had experienced a meteoric rise in recent weeks in a context of geopolitical and economic uncertainty, as well as expectations of a drop in American interest rates.

There was no obvious catalyst for this fall, other than a setback after a good period.

TO BE CONTINUED ON OCTOBER 23:

(Some data may have a slight lag)

(Written by Mara Vîlcu, edited by Augustin Turpin)

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