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Investing.com — European stock markets steadied after a shaky start on Wednesday after some weak and high-profile updates from companies across the region combined with the general uncertainty over the Bank of England’s next moves to dampen market sentiment.
By 04:45 ET (08:45 GMT), the benchmark Stoxx 600 index was down 0.2 points or 0.1% at 387.72 points, while the narrower Stoxx 50 was up 0.1%. Among national markets, Italy’s FTSE MIB underperformed again, losing 0.6% amid fears that rising bond yields will squeeze the life out of an economy still struggling to recover from the pandemic, while the U.K. FTSE 100 eked out a 0.2% gain as some bet on the Bank of England being forced to extend its support of the bond market beyond the end of the week.
Germany’s DAX index was flat, while France’s CAC 40 was up 0.1%.
The early dip had owed much to reports of a leak from a key Russian oil export pipeline in Poland, which sparked fears of a fresh act to sabotage Europe’s energy supplies, following on from the attacks on the Nord Stream pipeline under the Baltic Sea earlier this month.
However, Reuters quoted Poland’s top official in charge of energy infrastructure Mateusz Berger, as saying that the leak – on the main Druzhba strand that carries crude oil through Poland to Germany – appeared to be accidental.
Among individual stocks, French luxury goods giant LVMH (EPA:LVMH) stood out with a 2.4% gain after it reported a 19% annual gain in third-quarter sales at 19.8 billion euros ($19.2 billion), thanks largely to U.S. consumers taking advantage of the cheap euro and the freedom to take summer holidays. Analysts had expected only 13% growth.
However, there were weaker updates from Philips (AS:PHG), which cut its guidance again, sending its stock down 7.6% to a new 10-year low. The Dutch medical devices group warned of a deteriorating macroeconomic environment, as well as of supply chain bottlenecks that had lasted longer than it expected.
Another ominous update came from the U.K., where homebuilder Barratt Developments (LON:BDEV) warned that customers were losing interest in new-build properties due to high prices and rising borrowing costs. Mortgage rates have spiked in the U.K. and lenders have pulled hundreds of products for a hasty repricing after the new government’s announcement of massive unfunded tax cuts and energy subsidies sparked fears of still-higher inflation.
Barratt stock fell 6.7%, dragging the rest of the U.K. housebuilder sector down by between 3% and 5%.
