Europe close: Stocks finish lower
By Alexander Bueso
Date: Thursday 19 Oct 2023
(Sharecast News) - Stocks across Europe traded lower on Thursday as investors' appetite for risk declined in the wake of declines on Wall Street and Asian indices overnight and geopolitical tensions.
The pan-European Stoxx 600 Index was down 1.19% at 439.73.
.Frankfurt's DAX index was off by only 0.33% holding up relatively well, helped by decent gains from heavyweights SAP and Merck.
Spain's Ibex 35 and the French Cac-40 meanwhile were down by just over half a percentage point, but Italy's FTSE Mib gave back 1.38%.
Ongoing geopolitical tensions in Israel and neighboring regions were continuing to weigh on sentiment as well, as oil prices hit a two-week high on supply concerns and gold prices reached a four-week high on safe-haven demand.
Meanwhile, with US economic data continuing to beat market expectations, Treasuries were sold off overnight, resulting in a fresh 16-year high for 10-year bond yields, leading to significant selling pressure on US and Asian stocks.
"The surge in US Treasury yields had a ripple effect on regional bond markets in Asia. In particular, Japanese government bond yields climbed to levels not seen in a decade, reflecting the broader trend of increasing interest rates and bond yields in the region," said Patrick Munnelly, market expert at Tickmill Group.
In European company news, shares of B2B software giant SAP were up 5% after third-quarter operating profits rose to €2.28bn, from €2.08bn a year before, helped by strong growth in cloud revenues.
Merck, the German healthcare, life sciences and electronics firm, was up 3% after guiding to a return to organic sales growth in 2024 after a flat 2023.
Nokia was out of favour after reporting a 45% drop in net profits in the third quarter, as it announced job cuts in the region of 9,000 to 14,000.
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