European Markets Close Weak On Higher Oil Prices, U.S.-Iran Deal Uncertainty

(RTTNews) - European stocks fell on Wednesday, hurt by higher bond yields and rising oil prices amid lingering uncertainty about Iran and the U.S. reaching a deal to end their conflict and pave the way for the reopening of the Strait of Hormuz.

Some weak economic data from the region - UK GDP report being an exception - weighed as well on sentiment. Investors also noted U.S. GDP and consumer prices data that turned out to be a mixed batch.

The report from the Commerce Department showed consumer prices in the U.S. rose by less than expected on a monthly basis in August, while the annual rate of price growth also came in below estimates.

While the annual rate of consumer price growth remains well above the Fed's 2% target, traders may feel the data reduces the likelihood the central bank will raise interest rates next month.

According to CME Group's FedWatch Tool, the chances the Fed will raise rates by a quarter point have fallen to 37.1% from 50.9% on Tuesday.

Brent crude futures moved to around $99.00 a barrel, gaining more than 3%.

The pan European Stoxx 600 fell 0.5%. The UK's FTSE 100 ended 0.29% down. Germany's DAX and France's CAC 40 closed down by 0.79% and 0.89%, respectively. Switzerland's SMI settled lower by 0.59%.

DAX shed 4% in September, while CAC 40 fell 5.2% and the FTSE 100 shed 2% in the month.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Iceland, Ireland, Netherlands, Spain, Sweden and Türkiye closed weak today.

Greece, Poland and Russia ended higher, while Norway and Portugal closed flat.

In the UK market, Airtel Africa dropped about 3.3%. Barratt Redrow, BT Group, Hiscox, Prudential, Standard Chartered, Rolls-Royce Holdings, GSK, Diploma, M&G, Aviva, Babcock International, AstraZeneca and 3i Group lost 1%-2.5%.

Antofagasta moved up 3.2%. SSE, Reckitt Benckiser, National Grid, Games Workshop, Croda International, Kingfisher, Anglo American Plc, Computacenter, JD Sports Fashion, Investec, British Land, Next, Land Securities, Marks & Spencer and Autotrader Group gained 1%-2.3%.

In the German market, Commerzbank shed 4%. Vonovia, Siemens, Siemens Energy, Heidelberg Materials, Bayer, Symrise, Siemens Healthineers, Continental, Allianz, Hochtief, Hannover RE, Deutsche Telekom, Henkel and Munich RE ended down by 1%-2.3%.

Zalando moved up nearly 4%. BMW, Fresenius and Porsche Automobil Holding gained 1.1%-1.5%. MTU AeroEngines, Fresenius Medical Care, RWE and Merck also closed higher.

In the French market, TotalEnergies shed more than 3%. BNP Paribas, Bouygues, Edenred, Carrefour and AXA closed down by 2%-2.5%.

Unibail Rodamco, Teleperformance, Eurofins Scientific, Societe Generale, Credit Agricole, Schneider Electric, Vinci, Publicis Groupe, Hermes International and LVMH also ended notably lower.

Sanofi, Air Liquide, Pernod Ricard, Capgemini and EssilorLuxottica gained 0.7%-1.7%.

In economic news, data from the Federal Employment Agency showed Germany's unemployment increased more than expected in September, with the number of people out of work increasing by 12,000 from August, much larger than forecast of 1,000. This followed an increase of 5,000 in August.

At the same time, the unemployment rate remained unchanged at 6.4% in September. The rate also matched expectations.

Data from Destatis today showed that the adjusted jobless rate held steady at 4% in August. There were 1.76 million unemployed in August, up 9,000 from July, the labor force survey revealed. The unadjusted jobless rate rose to 4.3% in August from 3.9% in the last year.

Germany's retail sales grew 1.3% on a monthly basis in August, reversing a 3.2 percent fall in July, data from Destatis showed. Sales were forecast to climb 1.6%. On a yearly basis, retail sales fell 0.4% but slower than July's 2.2% decrease.

Preliminary estimate from the statistical office INSEE said French inflation accelerated more than expected in September on energy and fresh food prices. Consumer price inflation rose to 3% from 2.4% in August. A similar higher rate was last seen in February 2024. The rate was also above economists' forecast of 2.8%.

EU harmonized inflation climbed markedly to 3.4% from 2.6% in the prior month. The rate was seen at 3%.

Another data from INSEE showed that producer price inflation in the domestic market advanced to 4.8% from 3.5% in July. On a monthly basis, producer prices grew 1%, following July's 1.3% increase.

Revised data from the Office for National Statistics showed the UK economy expanded more than estimated in the second quarter, with GDP posting a quarterly growth of 0.5%, revised up from 0.4%. This followed an increase of 0.6% in the first quarter.

Another data from ONS showed that the UK current account deficit, including trade in precious metals, narrowed by GBP 1.2 billion to GBP 19.9 billion, or 2.5% of GDP in the second quarter.