European stock markets fell sharply amid mixed economic signals and escalating Middle Eastern tensions. The CAC 40 dropped 1.5%, while key indicators showed contractions in the eurozone’s service sectors and rising unemployment claims in the US. Oil prices climbed as conflict fears persisted, overshadowing other economic concerns.
European stock markets closed lower on Thursday amid cautious trading influenced by global economic indicators and geopolitical tensions in the Middle East. France’s CAC 40 fell 1.5% to 7,588.20 points, while Germany’s DAX decreased by 0.9%. The UK’s FTSE, supported by Bank of England Governor Andrew Bailey’s comments on a potentially more aggressive approach to interest rate reductions, dipped 0.2%. Overall, the EuroStoxx 50 lost 0.94%, with similar declines seen in the FTSEurofirst 300 and Stoxx 600. Investors reacted to several PMI indicators released that morning indicating a contraction of private sector economic activity in the eurozone during September. Notably, Germany, France, and the UK reported slowdowns in service sector activity. In the US, despite rising jobless claims pointing to weakness in the labor market, service sector activity exceeded expectations. Concerns intensified regarding potential Israeli strikes on Iranian oil infrastructure, which could escalate tensions in the region. Analyst Ashley Kelly warned that such actions might lead Iran to block the Strait of Hormuz or attack Saudi infrastructure, reminiscent of attacks in 2019. Among notable stock movements in Paris, the Française des Jeux dropped 6.36% following reports of the government’s plans to increase gambling taxes in 2025. Bouygues fell 4.75% after modest revenue forecasts for its telecom unit. In Milan, Stellantis lost 4% after Barclays downgraded its rating on the stock, impacting the broader European automotive sector. In the US, mid-session trading also reflected losses as Wall Street grappled with Middle East conflict fears. The Dow Jones was down 0.37%, while the Nasdaq Composite showed slight recovery. Economic indicators revealed a contraction in service activity across the eurozone, with significant slowdowns noted in Germany, France, and the UK. In the US, a more substantial rise in jobless claims than expected heightened concerns about economic health. However, ISM service index showed an increase to 54.9 in September, surpassing expectations. US Treasury yields rose following newly released unemployment claims and service sector data. The 10-year Treasury yield increased to 3.8209%, and the German 10-year Bund yield rose slightly to 2.1390%. Conversely, UK bond yields fell following Bailey’s remarks. Following rising yields, the dollar appreciated by 0.31% against a basket reference, while the British pound fell 1.14% against the dollar and 0.92% against the euro. Oil prices continued to rise amid fears of further Middle East escalation potentially disrupting oil supply, overshadowing global oversupply issues. Brent crude rose by 3.79% to $76.70 per barrel, while West Texas Intermediate (WTI) climbed 4.02% to $72.92.
The article discusses the impact of global economic trends and geopolitical issues on European and American stock markets. It highlights how investor sentiment is being shaped by a mix of economic reports and heightened tensions in the Middle East, particularly focusing on the implications of conflicts involving Israel and Iran. Detailed reactions of specific stocks and indices in Europe, along with relevant US economic indicators, are examined to provide a comprehensive view of the market’s response to these developments.
European markets closed lower amidst subdued trading, influenced by weak economic signals and geopolitical tensions in the Middle East. Despite rising jobless claims in the US, service sector activity showed unexpected growth. Rising oil prices reflect concerns over potential disruptions in Middle Eastern oil supply. Investors remain cautious as they digest the implications of both regional conflicts and upcoming economic reports.
Original Source: www.boursorama.com
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