European Stock Markets Show Minor Sentiment

Today, stock markets in Western Europe are declining. The composite index of the largest enterprises in the region Stoxx Europe 600 fell by 0.4% and amounted to 451.16 points.

The German DAX index in the course of trading decreased by 0.4%, the French CAC 40 – by 0.5%, the British FTSE 100 – by 0.1%. Spain’s IBEX 35 and Italy’s FTSE MIB lost 0.3% and 0.6%, respectively.

The price of oil and gas BP PLC (LON: BP) shares is growing by 0.2%, Royal Dutch Shell PLC – by 0.5%, ENI S.p.A. – by 0.3%. Shares of automakers Daimler AG (DE: DAIGn), Bayerische Motoren Werke AG and Renault S.A. decrease by 1.2%, 0.5% and 2%, respectively.

The cost of the operator of the UK’s fourth largest supermarket chain Wm. Morrison Supermarkets Plc is down 4%. A consortium led by the American investment company Clayton, Dubilier & Rice (CD&R) won the fight against other contenders for Wm. Morrison Supermarkets Plc, offering nearly $9.4 billion.

German pharmaceutical and chemical company Merck (NYSE: MRK) KGaA rose 1.7%. The company said Friday that it has collaborated with Ridgeback Biotherapeutics to develop a drug that reduces the risk of hospitalization or death from COVID-19 infection by 50%.

Slowdown in Economic Growth

A slowdown in economic growth, problems in global supply chains leading to a shortage of some goods in the market and a jump in prices for them, as well as an increase in interest rates are factors that put pressure on traders, writes Trading Economics.

Experts at Bank of America (NYSE: BAC) (BofA), in turn, predicted that by the end of this year, European markets could adjust downward by up to 10% amid a slowdown in the economic recovery in the region.

At the same time, analysts at BofA referred to the September data of the purchasing managers index (PMI), published on Friday by research IHS Markit. The PMI in the manufacturing sector in the eurozone last month fell to its lowest level since February at 58.6 points, up from 61.4 points in August.

In general, the decline in manufacturing activity in Europe was caused by problems in global supply chains and, as a result, an increase in purchase prices, the IHS report notes.

The bank also downgraded recommendations for financial and automotive stocks from “at market level” to “below market”, while recommendations for mining companies were upgraded from “below market” to “at market level” based on an outlook that does not imply a decline in performance in this sector until at least the beginning of next year.