On Thursday, key European stock indices declined moderately amid the release of fresh statistics on the EU countries.
At the time of writing, only the STOXX Europe 600 index of Europe's leading companies increased by 0.5% to 399.42 points. Meanwhile, the French CAC 40 dropped by 0.25%, the German DAX lost 0.14%, and the British FTSE 100 fell by 0.39%.
Top gainers and losers
The stocks of Swedish oil and gas company Orron Energy AB soared by 6.8%.
The stocks of British-Dutch oil and gas giant Shell PLC rose by 3.85%. Earlier, the company's management said that they expected weaker results in the Integrated Gas division in the third quarter of 2022 compared to the second quarter. The main reasons for the pessimistic forecasts were decline in oil refining margins and poor gas trading results.
The market capitalization of British Imperial Brands PLC increased by 3.8%. Earlier, the company announced its decision to launch a new share-buyback program of up to $1.13 billion.
The stocks of the British Diageo PLC, the world's largest spirits producer, fell by 0.3%.
The stocks of German drugmaker Merck KGaA have rallied steadily since the start of Thursday's trading after the news broke that it would begin to look into larger takeover deals in 2023.
Market sentiment
On Thursday, European investors focused on fresh statistics on the euro area. According to the results of August, the volume of retail sales in the EU countries fell by 2% in annual terms.
According to the Federal Statistical Office of Germany, the volume of incoming manufacturing orders in the country dropped by 2.4% in August on a monthly basis. Analysts said that the main reason for such negative statistics was the Russia-Ukraine crisis as well as the impact of COVID-19 restrictions on global supply chains.
At the same time, market experts forecasted an average decline of 0.7%. According to the revised data, the volume of manufacturing orders in Germany increased by 1.9% in July, rather than declined by 1.1% as previously reported.
On Thursday, the European Union adopted the eighth package of sanctions, which includes bans and restrictions on imports and exports of certain Russian goods. European traders assessed the impact of these sanctions on the local economy before the end of yesterday's trading session.
On Wednesday, high global oil prices exerted considerable pressure on European markets. The permanently rising prices of raw materials after OPEC+ decision to reduce oil production quotas result in soaring global inflation.
On Wednesday, the Organization of Petroleum Exporting Countries agreed to cut production by 2 million barrels a day in November in order to support falling prices.
At the time of writing, global crude oil prices were near a 3-week highs: the December Brent futures rose by 0.07% to $93.44, while the WTI contracts were trading at $87.77.
On Thursday, another trigger for the decline on European stock exchanges was the weak results of the latest trading session on the US stock markets resulting from the publication of the country's labor market data. According to the latest data, there is a steady demand in the US labor market. This fact alleviates investors' concerns about further interest rate hikes by the US Federal Reserve System.
On Wednesday, the Dow Jones Industrial Average sank by 0.14%, the S&P 500 lost 0.20%, and the NASDAQ Composite fell by 0.25%.
Meanwhile, Asian indices rose significantly during Thursday's session.
On Thursday, traders awaited the publication of the minutes of the ECB September meeting.
On Friday, the report on US nonfarm payrolls will be released and will help the Federal Reserve determine the future path of the country's monetary policy.
Previous trading results
On Wednesday, European stock indices closed in the red zone. At the same time, over the last three sessions stock indices were actively increasing and ended Tuesday's trading with a record six-month gain by 2.6-4.2%.
Consequently, the composite indicator of Europe's leading companies STOXX Europe 600 sank by 1.02% to 398.91 points.
The French CAC 40 was down 0.9%, the German DAX lost 1.21%, and the British FTSE 100 fell by 0.48%.
The stocks of British largest grocery retailer Tesco Plc were down 4.1%. The company cut pretax profit by 2.8 times in the January-June fiscal year 2023. In addition, the company worsened its full-year outlook due to changing consumer behavior and continued uncertainty in the trading environment amid skyrocketing inflation.
The stocks of Finnish airline Finnair rose by 1.5%. Earlier, the company reported that it had carried 890,500 passengers in September, i.e. 1.1% more than in August. At the same time, the number of Finnair passengers totaled only 298,200 in September 2021.
The market capitalization of Danish manufacturer of audio systems and other electronics Bang & Olufsen A/S fell by 7.6%. The company's revenue dropped by 8.2% in the first fiscal quarter.
The stocks of Swedish Avanza Bank Holding declined by 13.4%.
The stocks of French auto parts supplier Faurecia SE dropped by 6.2%.
The stocks of Swedish cloud computing services provider Sinch AB soared by 9.7%.
The market capitalization of Polish video game publisher CD Projekt rose by 1.7% after the company began working on several major games, including The Witcher.
On Wednesday, European investors focused on fresh statistics on the euro area. According to the final estimation of experts, in September the composite services and manufacturing PMI of 19 EU countries was 48.1 points down from 48.9 points in August. Meanwhile, earlier analysts forecasted that the index would decline to 48.2 points.
The final September PMI was the lowest in two years and eight months. Traditionally, the value of composite services and manufacturing PMI above 50 points indicates economic growth. In case it is below this level, it shows decline.
Moreover, on Wednesday S&P Global reported that the Eurozone Services Purchasing Managers' Index (PMI) was 48.8 points in September compared to 49.8 points in August. The September index was the lowest since February 2021. At the same time, analysts predicted a less significant decline in the index to 48.9 points. Besides, if Services Purchasing PMI drops below 50 points, it traditionally indicates a decline in business activity in the sector.
Meanwhile, Italy's Services PMI fell to 48.8 points in September from 50.5 points in August. In Germany, Services PMI sank to 45 points from 47.7 points. Meanwhile, in France the index rose to 52.9 points in September from 51.2 points in August.
Germany's foreign trade surplus decreased to 1.2 billion euros in August from 13.7 billion euros registered in 2021 and 3.4 billion euros in July. This considerable reduction in the country's trade surplus was a clear signal of a slowdown in external demand for goods produced by Germany's key manufacturing sector.
The volume of German exports in September, adjusted for calendar and seasonal factors, rose by 1.6% to €133.1 billion compared to August. Meanwhile, imports advanced by 3.4% to €131.9 billion.
Meanwhile, industrial production in France jumped by 2.4% in August compared to July's drop of 1.6%. At the same time, the August figure was the highest since January 2021.
