European Stocks Fall Amid Oil, Yields Rise On Mideast Tension

(RTTNews) - European stocks closed notably lower on Wednesday, as elevated oil prices and higher bond yields amid an escalation in Middle East tensions and concerns about France's fiscal outlook rendered the mood bearish.

Bond yields jumped amid France's deepening fiscal crisis.

Oil prices climbed higher following more attacks on vessels in the Persian Gulf region. Brent crude front-month futures, which rose to $102.59 a barrel, pared most of the gains subsequently and were up just modestly when the European markets ended.

U.K. Maritime Trade Operations said there had been nine attacks so far this month, half the number it reported for all of September in the waterway and Persian Gulf combined.

In a statement on the social media platform X, Yemen's Houthi group claimed that it carried out a series of drone and ballistic missile attacks targeting airports and military installations in Saudi Arabia.

The pan European Stoxx 600 fell 1%. The UK's FTSE 100 ended down 0.79%, Germany's DAX closed lower by 1.35% and France's CAC 40 finished with a loss of 1.22%. Switzerland's SMI edged up 0.14%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Greece, Ireland, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Türkiye ended with sharp to moderate losses.

Denmark, Iceland and Russia closed higher.

In the UK market, Prudential, Standard Chartered, HSBC Holdings, Investec, Lion Finance, Antofagasta, Barclays, Lloyds Banking Group, Whitbread and IMI closed down by 3%-5%.

Spirax Group, Smiths Group, Barratt Redrow, Balfour Beatty, Natwest Group, Endeavour Mining, Melrose Industries, Rolls-Royce Holdings, Informa, Halma, Rio Tinto, Diploma, Anglo American Plc and Severn Trent also declined sharply.

Pennon Group shares plummeted 17%. The water utility company announced a £550 million rights issue and a 30 percent cut in its dividend.

JD Sports Fashion moved up nearly 4%. Reckitt Benckiser, Haleon, British American Tobacco, Vodafone Group, Marks & Spencer, AstraZeneca, Sainsbury (J), The Sage Group, Compass Group, BT Group, GSK, Tesco, AutoTrader Group, Unilever and Relx gained 1%-3%.

In the German market, Porsche Automobil Holding, Scout24, Deutsche Telekom, Siemens Healthineers, Volkswagen, Hannover RE, Brenntag, Adidas, Henkel, Beiersdorf and Munich RE gained 1%-3.5%.

Fresenius Medical Care tumbled nearly 7%. Infineon shed about 5.7%. Deutsche Bank drifted down nearly 5%. MTU Aero Engines, Commerzbank, Heidelberg Materials, Hochtief, Siemens, Siemens Energy, Rheinmetall and Mercedes-Benz lost 2%-4%.

BMW, Vonovia, E.ON, Gea Group, Fresenius, Deutsche Post, Bayer and Deutsche Boerse also ended notably lower.

In the French market, Societe Generale, Legrand, ArcelorMittal, BNP Paribas, STMicroelectronics, Saint-Gobain, Credit Agricole, Safran and Engie ended lower by 3%-5%.

Thales, Schneider Electric, Unibail Rodamco, AXA, Veolia Environment, Bouygues and Vinci also closed weak.

Renault rallied nearly 4%. Pernod Ricard moved up 2.75%. Edenred, Sanofi, Carrefour, Stellantis, Orange, Teleperformance, Publicis Groupe, Capgemini and LVMH also closed on firm note.

Data published by Destatis showed Germany's industrial production recovered at a stronger-than-expected pace in August, expanding 2% on a monthly basis, in contrast to the 1.2% decrease in July. Production was expected to grow 0.5%.

On a yearly basis, industrial production grew 2.3%, reversing July's 1.8% fall.

France's trade deficit fell to EUR 6.12 billion in August from EUR 6.59 billion in July, data from the customs office showed. In the same period last year, the deficit was EUR 4.84 billion. Economists had forecast the trade shortfall to fall moderately to EUR 6.5 billion.

Exports dropped 0.8% on a monthly basis in August, while imports declined 1.5%. On a yearly basis, exports and imports grew 5.3% and 5.7%, respectively.

Monthly data published by Lloyds Banking Group showed UK house prices were flat in September on a monthly basis, following a 0.3% all in August and a 0.1% drop in July. Prices were also unchanged annually in September compared to a decline of 0.4%in the preceding period.

Lloyds Mortgages Director Andrew Asaam said property prices have so far proved resilient during a period of higher mortgage rates, which has been driven by changing expectations around the future path of Base Rate.