European Markets Pare Early Gains, Close On Weak Note; Tech Stocks Tumble

(RTTNews) - European stocks pared early gains and settled mostly lower on Thursday, as stocks from technology and financials sector tumbled on selling pressure.

Tech stocks tumbled on concerns that a Democratic-led U.S. Congress could push for tighter regulation of AI development and data center construction, which could lead to a slowdown in capex.

In addition to digesting a slew of corporate earnings announcements, investors also reacted to the Bank of England's decision to raise interest rate by 25 basis points.

The U.K. central bank raised its key interest rate on Thursday, as expected, for the first time since 2023 in an attempt to cushion the future impact of the second-round effects of high energy prices and warned that more hikes would be necessary if the Middle East conflict does not resolve fast.

"There is now enough inflationary pressure in the pipeline caused by the rise in energy prices that an increase in Bank Rate is warranted," BoE Governor Bailey said.

"Today's increase shouldn't be seen as the first in an inevitable long sequence of hikes," Bailey said. "But, unless the conflict in the Middle East is resolved, neither does it seem likely to be the last increase."

The central bank expects U.K. inflation, which has now risen to 3.5%, to rise even further to about 5% by mid-2027 driven by the knock-on effects of higher energy prices.

The pan European Stoxx 600 ended down 0.38%. The UK's FTSE 100 and Germany's DAX both drifted down 0.43%, while France' CAC 40 advanced 0.34%. Switzerland's SMI ended lower by 0.37%.

Among other markets in Europe, Austria, Czech Republic, Denmark, Finland, Greece, Ireland, Italy, Netherlands, Norway, Sweden and Türkiye closed weak. Ireland edged down marginally.

Belgium, Poland, Portugal, Russia and Spain ended higher.

In the UK market, Endeavour Mining climbed nearly 6%. Airtel Africa moved up nearly 4%. Drinks giant Diageo rallied 3% after posting an unexpected gain in quarterly organic sales. Imperial Brands, Next, Coca-Cola Europacific Partners, Howden Joinery Group, Admiral Group, Intercontinental Hotels Group and Fresnillo gained 2%-3%.

Croda International, British American Tobacco, National Grid, Tesco, Experian, Unilever, Relx, SSE and The Sage Group also closed notably higher.

Coca-Cola HBC tanked nearly 19% after a report that its Russian operations could potentially be at risk.

Computacenter dropped more than 7%. Polar Capital Technology Holding, BAE Systems, Scottish Mortgage, Natwest Group, Halma, Prudential, Antofagasta and Pershing Square Holdings ended lower by 3.5%-6%.

Anglo American Plc, Rolls-Royce Holdings, Metlen Energy & Metals, Melrose Industries, IAG, Standard Chartered, ICG and Barclays also declined sharply.

In the German market, Zalando climbed 4.3%. Bayer, BASF, Fresenius Medical Care, Deutsche Boerse, E.ON, Hannover RE, Heidelberg Materials, Daimler Truck Holding, Munich RE, Henkel, Adidas, Vonovia and Allianz gained 1.5%-3.6%.

Mercedes-Benz, SAP, Volkswagen, Porsche Automobil Holding, Fresenius and Scout24 also ended notably higher.

Meal-kit maker HelloFresh soared 14% after third-quarter core profit beat forecasts.

Shares of defense group Rheinmetall tanked nearly 17%, hurt by the company cutting its 2026 outlook for the second time in three months. The group cited delays with the Boxer armored vehicle program for the downward revision in outlook.

Infineon lost 8.6%. Siemens Energy shed about 5%. Hochtief dropped nearly 4% and Siemens ended 1.4% down.

Commerzbank lost 2.4% after lowering its outlook for lending income this year. Deutsche Telekom drifted down nearly 3% despite reporting a 7.5% increase in third-quarter 2026 revenue.

Deutsche Telekom drifted down nearly 2% despite the telecom company reporting a 7.5% increase in third-quarter 2026 revenue.

In the French market, Bouygues climbed 2.5% after the conglomerate upgraded its full-year outlook.

Saint-Gobain, Edenred and L'Oreal gained 1.8%-2%.

Credit Agricole, Vinci, Danone, Safran, Pernod Ricard, Air Liquide, EssilorLuxottica, Carrefour, AXA, Eurofins Scientific, Orange and Dassault Systemes advanced 1%-1.5%.

Air France-KLM skyrocketed nearly 13%. The airline group reported stronger-than-expected third-quarter operating profit, driven by strong demand for non-stop services to India and Asia, alongside the continued expansion of its premium offering.

STMicroelectronics tumbled nearly 11%. Stellantis drifted lower by 4.4%. Schneider Electric, Teleperformance, Thales and Kering also ended notably lower.

Legrand jumped nearly 6% after reporting earnings per share of Euro 1.46 for the third quarter, compared with Euro 1.11 a year ago. Revenue for the third quarter came in at Euro 2.93 billion, compared with Euro 2.19 billion in the year-ago quarter. However, the stock pared gains and ended around its previous closing price.

ArcelorMittal dropped nearly 1% despite the world's second-largest steelmaker's quarterly core profit topped expectations.

Data from the statistical office INSEE showed industrial production in France fell 0.5% month-on-month in September, following a 0.4% decline in August, defying expectations of a 0.3% rebound. On a yearly basis, activity dropped 1.3%, the most since April 2025, and following a 0.2% gain in August.

The S&P Global France Construction PMI fell to 38.8 in October, down from 39.8 in the previous month, data from S&P Global showed.

Data from S&P Global showed the S&P Global UK Construction PMI fell to 43.6 in October from 46.1 in September, missing expectations of 46.1 and signaling the sharpest contraction in construction output since June.

Data from the Society of Motor Manufacturers and Traders Limited showed UK new car registrations increased 5.4% year-on-year to 152,730 units in October, marking an 11th consecutive monthly gain, although growth slowed following September's seasonal surge.

Data from Destatis showed Germany's factory orders rebounded in September, increasing by 4.4% on a monthly basis, in contrast to the revised 10.1% decline logged in August. However, the pace of growth was weaker than forecast of 4.6%.

On a yearly basis, growth in industrial orders improved marginally to 3.3% from 3.2% in the previous month.

Germany's construction activity contracted the most since early 2025 in October, survey data published by S&P Global showed. The construction Purchasing Managers' Index fell to 41.6 in October from 43.5 in the previous month. The latest score was the lowest since March 2025.