European Stocks Slip as Oil Rebound Overshadows U.K. GDP Strength

(RTTNews) – European equities shed early gains and turned negative on Wednesday as oil prices recovered, fueled by ongoing uncertainty over a U.S.-Iran resolution to their conflict.

Regional economic weakness pressured German and French stocks, whereas U.K. equities slightly outperformed due to better-than-expected GDP figures.

Investors awaited U.S. inflation data for insights into the Federal Reserve’s forthcoming interest rate decisions.

Brent crude futures for December delivery rose to $97.90 per barrel, gaining approximately 1.8%. Persistent worries over energy supply, driven by stalled U.S.-Iran negotiations to reopen the Strait of Hormuz, kept the oil market highly volatile.

The U.K.’s FTSE 100 traded 0.17% higher at 10,655.61, having earlier reached 10,727.68. Germany’s DAX, which peaked at 25,584.38, fell marginally to 25,356.91, while France’s CAC 40 dipped 0.44% to 8,000.59, down from a high of 8,068.51. The pan-European Stoxx 600 edged slightly lower at 637.58.

In Germany, Commerzbank fell roughly 2.7%. Vonovia, Siemens Healthineers, Allianz, SAP, and Siemens declined 0.8% to 1.6%.

Zalando, Porsche Automobil Holding, and BMW rose 3.3% to 3.5%. Volkswagen gained nearly 2%, while Fresenius, MTU Aero Engines, Mercedes-Benz, RWE, and BASF advanced 1% to 1.6%.

In Paris, EssilorLuxottica, Stellantis, and Pernod Ricard climbed 2%, 1.6%, and 1.5%, respectively. Renault gained 1.1%, alongside moderate advances for Hermes International, Kering, Air Liquide, and Sanofi.

Teleperformance dropped about 6%. TotalEnergies, Publicis Groupe, AXA, BNP Paribas, Bouygues, Carrefour, Vinci, Unibail Rodamco, Dassault Systemes, Eurofins Scientific, Engie, and Edenred lost 1% to 2.5%.

In the U.K., Antofagasta, Reckitt Benckiser, SSE, National Grid, Marks & Spencer, Severn Trent, and United Utilities rose 2% to 3%.

The Sage Group, Ithaca Energy, Relx, Experian, BT Group, BP, Shell, LSEG, and Rolls-Royce Holdings fell 0.9% to 2%.

Kingfisher, British Land, JD Sports Fashion, Croda International, ICG, Anglo American Plc, Spirax Group, and Rio Tinto also posted sharp gains.

Germany’s unemployment rose more than anticipated in September, with the jobless total increasing by 12,000 from August, well above the forecast of 1,000, following a 5,000 rise in August.

Despite this, the unemployment rate held steady at 6.4% in September, matching expectations.

Destatis data indicated the adjusted jobless rate remained at 4% in August, with 1.76 million unemployed, up 9,000 from July. The unadjusted jobless rate increased to 4.3% in August from 3.9% a year earlier.

German retail sales grew 1.3% month-over-month in August, reversing a 3.2% drop in July, though the forecast was for a 1.6% climb.

Year-over-year, retail sales fell 0.4%, a significant improvement from July’s 2.2% decline.

INSEE’s preliminary estimate showed French inflation accelerated more than expected in September, driven by energy and fresh food costs. Consumer price inflation rose to 3% from 2.4% in August, exceeding the forecast of 2.8%.

EU harmonized inflation jumped to 3.4% from 2.6% the prior month, compared to an expected 3%.

On a monthly basis, French consumer prices fell 0.3%, reversing a 0.7% rise in August, compared to a forecasted 0.5% drop. The harmonized index of consumer prices also slid 0.4%, versus a 0.7% prior-month rise and an expected 0.5% decline.

INSEE also reported that domestic producer price inflation rose to 4.8% from 3.5% in July, with monthly producer prices increasing 1% following July’s 1.3% gain.

Revised data from the Office for National Statistics showed the U.K. economy expanded more than initially estimated in Q2, with GDP growth revised up to 0.5% from 0.4%, following a 0.6% rise in Q1.

In Q2, the services sector expanded 0.6% and construction grew 0.8%, while production shrank 0.1%. Real household final consumption expenditure increased 0.3%, though government spending dropped 0.5%.

Further ONS data revealed the U.K. current account deficit, including trade in precious metals, narrowed by GBP 1.2 billion to GBP 19.9 billion, or 2.5% of GDP, in Q2.

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