Europe close: Geopolitical jitters put a lid on stocks
By Alexander Bueso
Date: Wednesday 20 Nov 2024
(Sharecast News) - European shares surrendered morning gains on Wednesday as continuing geopolitical tensions in Ukraine hit sentiment.
"Yesterday afternoon's recovery in stock markets has been waylaid by news that Ukraine has now used British missiles against Russian targets, while tech stocks have been further hit by some pre-Nvidia earnings nerves," said IG chief market analyst Chris Beauchamp.
"Now that the initial post-election euphoria has faded, it is clear that markets are struggling for a catalyst to provoke a new rally. US markets in particular have done well in recent months, but another period of consolidation seems likely."
The pan-European Stoxx 600 index drifted lower by 0.02% to 500.49 with all major bourses slightly lower.
Spain's Ibex 35 was the exception, ending the day 0.01% in the black at 11,589.50.
Investors were keeping a close eye on the escalation of the war in Ukraine following reports that Kyiv had now used UK-supplied Storm Shadow missiles for the first time.
The night before, Russia issued a new nuclear doctrine that lowered the threshold for using nuclear weapons.
Offsetting that to an extent, Reuters cited current and former Russian officials regarding Moscow's current negotiating stance.
In economic news, UK inflation jumped past the Bank of England's target in October after energy bills rose, according to data released on Wednesday by the Office for National Statistics.
The consumer price index rose at an annual rate of 2.3% in October, up from 1.7% in September and above the 2.2% expected by economists.
Meanwhile German producer prices fell 1.1% in October as energy costs declined, according to official data published on Wednesday.
Energy prices were 5.6% lower year on year but rose 0.6% compared with September 2024. Across all customer groups, natural gas prices declined by 10.1% from October 2023 and were up 1.1% on September 2024, said the federal statistics office Destatis.
On the equities front, traders are wide-eyed with anticipation awaiting the latest results in the US from tech darling Nvidia.
In equity news, shares in Grifols gained modestly as the Spanish drugmaker rejected Brookfield Asset Management's indicative offer, which values the firm at €6.45bn.
Sage Group surged to the top of the Stoxx as it posted a 21% rise in full-year underlying operating profit and announced a share buyback of up to £400m.
Vistry shares fell 5% as the UK housebuilder said its chief operating officer of Vistry is to leave after his role was axed.
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