On Thursday, the key European stock indices declined. Traders focused on the outcome of the European Central Bank meeting. In addition, investors continue to analyze the corporate earnings report for the third quarter of 2022 from top companies in the EU.
At the time of writing, the composite indicator of Europe's leading companies STOXX Europe 600 lost 0.22% and fell to 409.42 points.
The French CAC 40 and the German DAX were down 0.2%, while the British FTSE 100 rose by 0.3%.
Top gainers and losers
The stocks of Swiss bank Credit Suisse Group AG plummeted by 11% to a two-week low. On Thursday, the company's management announced plans to raise $4.07 billion in capital and sell part of its investment business. In addition, the bank said it might lay off 9,000 employees. As for the latest financial statements of Credit Suisse, its net loss amounted to $4.09 billion for the third quarter, while its quarterly revenue fell by 30%.
The stocks of British bank Lloyds sank by 1.3% amid a decline of pretax profits by 26% in July-September due to write-offs following downgrading macroeconomic forecasts.
The market capitalization of Spanish bank Banco de Sabadell fell by 0.5% despite an increase in net profit to 317 million euros in the third quarter 2022 from 149 million euros in 2021. Moreover, the day before the company's management approved a dividend payout ratio to 40% of profits.
The stocks of British FMCG supplier Unilever dropped by 0.1%. At the same time, the company increased its turnover in the previous quarter by 17.8% due to the fact that higher prices compensated for lower sales.
The stocks of French oil and gas giant TotalEnergies rose by 2.1%. In July-September, the company increased its net profit by 43% in annual terms amid permanent increase in oil and gas prices.
Quotes of British-Dutch energy company Shell soared by 3.3%. In the previous quarter, Shell cut its net profit nearly threefold. However, the adjusted figure was better than preliminary market expectations. In addition, the energy giant announced plans to buy back shares worth up to $4 billion and raise dividends by 15%.
The market capitalization of German air carrier Deutsche Lufthansa AG added 1.6% amid the release of a quarterly report on net profit and nearly doubled revenues.
The stocks of Franco-Italian chipmaker STMicroelectronics sank by 4.8%. Earlier, the company's management predicted a decline in sales growth in the last 6 months of 2022.
The stocks of Finnish oil refining company Neste Oyj collapsed by 8% after the publication of weaker operating indicators for July-September than analysts had predicted.
Market sentiment
In addition to quarterly reports of key companies in Europe, on Thursday, stock market participants awaited the outcome of the European Central Bank meeting. Analysts predicted the regulator would aggressively tighten its monetary policy amid persistently rising inflation in the eurozone. The ECB will likely raise its interest rate by 0.75% up to 2% from 1.25%. At the same time, experts say that analysts awaited not the regulator's decision on the rate but its chief Christine Lagarde's forecasts of the ECB further steps in case inflation reached nearly 10% versus the target level of 2%.
Notably, earlier in its September meeting the European Central Bank raised the prime rate on loans to 1.25%, the rate on deposits to 0.75%, and the rate on margin loans to 1.5%. At the same time, the discount rate was increased by 0.75% for the first time in history.
Moreover, members of the Central Bank noted that the regulator intended to continue raising the rate in upcoming meetings. Thus, ECB President Christine Lagarde said that the further pace of interest rate hikes would depend on statistical data.
On Thursday, European investors also focused on fresh eurozone statistics. According to the research company GfK, the Consumer Confidence Index of Germany in November slightly rose from its all-time low and amounted to -41.9 points against the revised -42.8 points in October. The increase in the index was recorded for the first time after five months of decline. Currently, German authorities are struggling with permanently rising energy prices and slowing growth.
Meanwhile, the unemployment rate in Spain rose to 12.67% in the third quarter from 12.48% in the second quarter.
Previous trading results
On Wednesday, the European stock indices closed in the green zone.
The composite indicator of Europe's leading companies STOXX Europe 600 rose by 0.7% to 410.31 points. The French CAC 40 gained 0.41%, the German DAX jumped by 1.09%, and the British FTSE 100 advanced by 0.61%.
The stocks of Italian commercial bank Unicredit jumped by 4.3% after the news came of a more dramatic revenue increase than market forecasts both in January-September and in the third quarter 2022. In addition, the Italian bank raised its earnings forecast until the end of 2022.
The quotes of Dutch brewery Heineken sank by 5.4%. Earlier, the managers of the world's second-largest beer producer reported signs of declining demand for its products in the EU and warned about a slowdown in economic growth in the future. At the same time, the company increased its revenue by 27.5% at the end of the third quarter of fiscal 2022. However, it did not justify the consensus forecasts of analysts.
The market capitalization of British bank Barclays Plc fell by 0.3% despite the fact that the company increased its net income by 10% in July-September amid strong fixed-income trading. The bank's final figure noticeably exceeded analysts' preliminary expectations. Moreover, the management of Barclays Plc reported a significant increase in reserves in the reporting period.
The stocks of Germany's largest bank Deutsche Bank AG dropped by 1.2%. At the same time, the company increased its net profit by 475% in the previous quarter of fiscal 2022, significantly exceeding analysts' expectations. Deutsche Bank's management team reported permanently difficult market conditions and increasing cost pressure.
The stocks of Swedish music streaming service operator Spotify Technology plummeted by 10.6%. The company increased its revenue by 21% in the third quarter of fiscal 2022. However, it suffered a net loss compared to the profit for the same period in 2021.
The stocks of German chemical company BASF SE declined by 1%. The day before, BASF SE confirmed its forecast of financial performance for 2022 and reported a decrease in net profit in July-September.
The stocks of German sporting goods maker Puma SE rose by 0.4%. The company increased its net profit in the third quarter. However, its profitability fell amid higher prices for raw materials.
Quotes of UK consumer goods maker Reckitt Benckiser Group Plc dropped by 4% despite the fact that the company increased its revenue by 14% in the previous quarter due to positive changes in exchange rates. Moreover, Reckitt Benckiser Group Plc's management projected that sales for 2022 would be within the upper boundary of the previous forecast.
The market capitalization of German carmaker Mercedes-Benz Group AG added 1.1%. The company increased its revenue by 19% in July-September and more than doubled its net profit due to higher demand and prices for its products.
The stocks of Danish brewer Carlsberg AS went up 2%. The company improved its forecast for operating profit growth till the end of 2022 amid high growth rates of sales in July-September.
