Europe close: Stocks off to positive start in Q4, currency and bond markets calmer
By Alexander Bueso
Date: Monday 03 Oct 2022
(Sharecast News) - European shares clocked in with modest gains on Monday, even as the UK government was forced into a u-turn on a planned tax cut for the wealthy and oil prices spiked on reports of potential output cuts by major producers.
That was despite financial stability concerns around investment bank Credit Suisse, although news of Ukrainian advances in the south of the country were possibly acting as an offset.
So too, weaker-than-expected factory sector survey readings in the States led some analysts to talk of looming weakness in the sector which might entail a silver lining in the form of a less aggressive Federal Reserve.
At the start of the final quarter of the year, the pan-European Stoxx 600 index was up 0.77% at 390.83, having traded down 1.25% towards the start of the session.
Britain's FTSE 100 edged up 0.21% to 6,907.98 after Finance Minister Kwasi Kwarteng was forced to reverse a cut in the top rate of income tax after the measure sent the pound into freefall during the previous week and threatened a rebellion by members of the ruling Conservative Party.
Notably, sterling extended its rally, rising by 1.33% to 1.1318 versus the US dollar, while the euro added 0.15% to 0.9817 against the Greenback.
In parallel, the yield on the benchmark 10-year Italian government bond retreated by 31 basis points to 4.2%.
On oil markets, Brent crude futures jumped 3.7% to $88.82 a barrel on the back of reports that OPEC+ was considering an oil output cut of more than a million barrels per day.
In economic news, manufacturing activity in the euro area contracted at a faster cadence in September, as new orders slid.
The S&P Global eurozone manufacturing purchasing managers' index (PMI) came in at 48.4 for September, compared to the downwardly-revised reading of 49.6 for August.
It was just below the market consensus, which had pencilled in a reading of 48.5. A PMI reading above 50 denotes expansion, while one below 50 signals contraction.
In equity news, Credit Suisse dipped 1%, but only after having recovered from earlier sharp falls, following reports that the bank's executives spent the weekend reassuring large clients, counterparties and investors about its liquidity and capital position.
Carnival shares continued to slump after Friday's losses when the cruise operator said it was expecting to report a loss for the fourth quarter, surrendering 7%. Travel company Tui also lost ground, along with budget airlines easyJet and Wizz Air, as the prospect of higher fuel costs hit sentiment.
Logitech International fell 2% after a downgrade for the computer equipment maker by Exane BNP Paribas. Just Eat Takeaway retreated 6% after a rating cut by JP Morgan.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN