European stocks mixed amid economic concerns and earnings

European stocks opened mixed as investors were on edge due to the prevailing global economic conditions and a mixed bag of earnings reports from various companies.

The benchmark Stoxx 600 index dropped by 0.1%, with media stocks experiencing a 1.15% decline. In contrast, oil and gas stocks surged by 1.16% owing to a spike in crude oil prices.

Overall, the Stoxx 600 index is poised for its worst monthly performance since September 2022, according to data from the London Stock Exchange Group (LSEG).

In terms of individual stocks, NatWest experienced a significant decline, plummeting by as much as 17% near the opening before settling at around 12% lower compared to the previous session. This dramatic drop occurred after the UK’s Financial Conduct Authority (FCA) discovered “potential regulatory breaches” in its investigation into a banking account scandal that led to the resignation of NatWest CEO Alison Rose. Despite this, the bank’s third-quarter results were roughly in line with forecasts.

Meanwhile, Deutsche Bank’s stock price rose after beating forecasts, while Barclays’ stock took a hit following its warning of impending cost-cutting charges.

Investors are also closely monitoring messages from central banks regarding the likelihood of “higher for longer” interest rates, as well as various economic indicators, given that bond yields remain high.

The European Central Bank (ECB) held interest rates steady on Thursday after a series of 10 hikes, with ECB president Christine Lagarde stating that the current rates are suitable for achieving the inflation target over a “sufficiently long duration.” She also emphasised that discussing potential rate cuts at this juncture would be “totally premature.”

Investors are now eagerly awaiting the release of the US personal consumption expenditures data, which is the Federal Reserve’s preferred inflation gauge.

Meanwhile, in the Asia-Pacific region, stocks were mainly lower, although mainland China bucked the trend. US futures, on the other hand, were on the rise.

© 2023 funds europe

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