European stocks extend slide as French unrest rattles investors
Several major European sectors trade lower, with industrials leading declines
European equities saw a slight decline on Tuesday (Oct 20) due to violent protests in France dampening risk appetite and impacting equities in the euro zone's second-largest economy. The CAC 40 index dipped 0.38%, while the Stoxx 600 fell 0.14%, hovering around 638.64 points following a 0.8% drop the previous day.
Investors are cautious due to high oil prices, elevated bond yields, and the upcoming French presidential elections in six months. Burns McKinney, a portfolio manager at NFJ Investment Group, noted that earnings growth can still drive the market despite headwinds. However, Neil Wilson, an investor strategist at Saxo UK, cautioned that investors should be wary about Europe's policy direction and the impact of French politics.
Several sectors faced declines, with industrials leading the drop, primarily due to ABB's 5% fall as concerns over the viability of AI investments grew. OVHcloud, a French cloud operator, surged 18% after reporting positive levered free cash flow for the first time since its 2021 listing. Meanwhile, Comet Holding rose 4.7% after a boost in third-quarter sales, fueled by data center expansion and AI infrastructure.
Meanwhile, British workers witnessed a slight increase in pay growth over the three months ended August, potentially supporting the Bank of England's case for an interest rate hike next month. The FTSE 100 closed 0.29% lower, while the European Central Bank is expected to maintain its stance this month, with a 85% probability of a rate hike in December, according to LSEG data.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
