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HomeMarketEuropean stocks largely lower; corporate earnings, U.S. midterms in focus By

European stocks largely lower; corporate earnings, U.S. midterms in focus By

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By Peter Nurse – European stock markets largely slipped lower Tuesday, as investors digested a flurry of corporate earnings ahead of the crucial U.S. midterm elections.

At 04:00 ET (09:00 GMT), the in Germany traded largely flat, in France fell 0.5% and the contract in the U.K. dropped 0.5%.

Investors are keeping a wary eye on events in the U.S., as voting starts Tuesday in the midterm elections, with control of the Congress at stake. The Republicans are widely expected to win control of the House of Representatives and possibly the Senate, a result that could limit the amount of budget spending that Democrat President Joe Biden can authorize.

Back in Europe, the quarterly corporate earnings season is in full swing, with a number of significant companies reporting their third-quarter results.

AB Foods (LON:) stock rose 4.4% after the owner of fast fashion retailer Primark reported a 42% rise in operating profit for 2020-21, prompting a £500 million (£1 = $1.1474) share buyback and an 8% increase to its total dividend. 

That said, the company did warn of “substantial and volatile” input cost inflation that will hit results in its current financial year.  

Pandora (CSE:) stock soared over 8% after the Danish jeweler beat third-quarter profit expectations, while Munich Reinsurance (ETR:) stock rose 1.6% after the German reinsurer posted a healthy rise in net profit in the third quarter, despite big claims from Hurricane Ian, “firmly” sticking to its full-year earnings target.

On the flip side, Renault (EPA:) stock slumped 4.7% after the French car maker announced plans to spin off its electric vehicle unit as part of its aim to boost its profit margin to above 10% by 2030 and reinstate dividend payouts next year. 

Persimmon (LON:) stock fell 7.9% after the U.K. housebuilder reported rising cancellations, saying housing sales were being hit by rising inflation and the looming recession.

The focus of the European data calendar will be Eurozone for September, which are expected to grow 0.4% on the month, still down 1.3% on the year as consumers struggle with rising prices.

Oil prices fell Tuesday, hit by fresh COVID outbreaks in China which weighed on hopes of a rebound in oil demand from the world’s top crude importer.

Official data showed that cases sharply escalated in a number of major Chinese cities, just after Chinese health officials reaffirmed the country’s commitment to its strict zero-COVID policy.

By 04:00 ET, futures traded 0.6% lower at $91.25 a barrel, while the contract fell 0.4% to $97.52. 

Additionally, fell 0.8% to $1,667.95/oz, while traded 0.4% lower at 0.9975.

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