Europe midday: Stoxx 600 hits eight-week low

The pan-European Stoxx 600 index was trading nearly 0.9% lower at 507.15 by 1252 CET, with heavy falls from the likes of BNP Paribas, Smith & Nephew and AB InBev. Negative reactions to results from US tech titans Microsoft and Meta after the closing bell on Wednesday were also dampening the mood.

The Stoxx 600 has now fallen 2.7% over the past three days, trading at its lowest level since 6 September. The index is on track for a drop of more than 3% over October – its worst monthly performance since October 2023.

In economic news, eurozone inflation met the European Central Bank's target level of 2% in October after rebounding strongly from its lowest rate in three years the previous month. Eurostat reported that the harmonised index of consumer prices rose at a year-on-year pace of 2.0% this month, up from 1.7% in September and ahead of the 1.9% forecast.

But, according to Oxford Economics, the upside surprise likely "won't spook the ECB". Rory Fennessy, senior economist, said: "The slight uptick in eurozone inflation in October was expected following the base effect-driven dip in September. Given weak underlying growth dynamics, we think inflation will undershoot ECB forecasts next year and allow for a sustained pace of rate cuts in H1 2025."

In other news, retail sales in Germany unexpectedly rose for the third straight month in September, according to data from the Federal Statistical Office. Retail sales were 1.2% higher over the month in price-adjusted terms, following a revised 1.2% increase in August and much better than the 0.5% drop expected.

Meanwhile, manufacturing activity in China expanded in October for the first time since April, according to figures by the National Bureau of Statistics. The official purchasing managers’ index rose to 50.1 from 49.8 in September, beating expectations for a reading of 49.9. Meanwhile, the non-manufacturing PMI rose to 50.2 in October from 50.0 in September.

Market movers

French financial services group BNP Paribas dropped 5% after underwhelming with third-quarter profit growth 5.9% to €2.87bn, matching analysts' expectations. While the investment banking division performed well, the retail business saw revenues fall as a result of lower user-car prices.

London-listed medtech group Smith & Nephew tanked 13% as it slashed full-year sales guidance on weaker-than-expected sales in China in the third quarter. Annual revenue growth is now tipped to come in at around 4.5%, down notably on a previous forecast for between 5% and 6%.

Belgian brewing giant AB InBev fell 5% after reporting a 2.4% drop in organic volumes in the third quarter due to weak consumer demand in China. The consensus forecast was for just a 0.4% decline year-on-year.

German industrial titan Siemens edged lower, albeit outperforming the wider market, after a $10.6bn deal to take over US software group Altair.

Shell rose in London after third-quarter profits dipped less than expected. The oil major said lower commodity prices pushed adjusted earnings down 4% to $6.03bn, well ahead of the $5.36bn expected by analysts.

Also in the UK, Anglo American's shares were rising after BHP Group quashed speculation that it has walked away from its pursuit of the mining firm. At an AGM this week, BHP's chair said the company had "moved on" after three previous takeover offers were rejected, but on Thursday clarified that this was not an official withdrawal under rules of the UK Takeover Code.

Auto giant Stellantis gained in Madrid despite reporting that third-quarter shipments dropped 20%. The company said it was working quickly to cut US inventories and remains on track to launch 20 new models this year.

Meanwhile, in Copenhagen, Danske Bank was rising after boosting its full-year outlook after third-quarter earnings at Denmark’s biggest lender smashed expectations.