The key stock indicators of Western Europe show mainly a decrease on Thursday. Market participants analyze quarterly reports of euro region companies, as well as discuss the results of the US Federal Reserve meeting, announced the day before.
Thus, at the time of writing, the composite index of the leading companies in Europe STOXX Europe 600 increased by 0.29% - up to 429.37 points.
Meanwhile, the UK FTSE 100 shed 0.18%, the French CAC 40 shed 0.07% and the German DAX shed 0.4%.
Rising and Falling Leaders
The value of securities of the German automaker Volkswagen soared by 2.3%. The company's revenue grew by 3% in the second quarter of fiscal 2022.
The market capitalization of the Dutch multinational car manufacturer Stellantis NV rose by 3.4%. The company's revenue increased by 21% in the first half of the year, while net profit increased by a record 37%.
The share price of Belgian brewer Anheuser-Busch InBev NV increased by 3.7%. The company previously reported that its revenue increased by 9.3% in April-June, thanks to higher sales volumes and higher prices. At the same time, the net profit of Anheuser-Busch InBev NV collapsed over the past period by 16%.
Quotes of the Swiss food manufacturer Nestle SA fell more than 2% on news of a 12% drop in the company's net profit in the first half of the year.
The market capitalization of the British bank Barclays PLC decreased by 2.5%. The creditor's net profit almost halved in April-June.
Quotes of a number of major oil and gas companies sank noticeably amid weak corporate reporting. Thus, the value of securities of the French TotalEnergies fell by 3.2%, and the Austrian OMV - by 4.4%.
The share price of France's largest telecommunications company Orange SA fell by more than 3%, despite the fact that the day before, the company's managers spoke about the growth of its core operating profit in the second quarter by 0.5% in annual terms.
Factors Influencing the Market
The key reason for the European stock market's spectacular rise on Thursday was the decision taken the day before by the Fed. Following the meeting on July 26-27, the US central bank raised the interest rate by 0.75 percentage points to 2.25-2.5% per annum.
The final increase in the base rate was within the expectations of stock market participants, so it reacted to the Fed's decision with a steady increase. At the same time, experts believe that only a 1% rise in interest rates could become a negative scenario for investors.
Traders also became confident due to the speech of Fed Chairman Jerome Powell, at a press conference following the US central bank meeting. On it, he said that the Fed plans to continue to resist record inflation and bring it back to 2% without bringing down the US economy. Investors took the message as a potential promise to ease monetary policy in the future.
In addition, Powell said that plans to reduce the balance sheet of the central bank remain in force and from September the sales volume of shares will be doubled to $95 billion per month.
Powell assured listeners that the global economy has not yet fallen into recession and pointed to the strength of the labor market, which has already created 2.7 million new jobs in 2022.
European stock market participants are waiting for the preliminary data on inflation in the country from the statistical office of Germany. Experts suggest that the agency will report a slowdown in annual inflation in July to 7.4% from 7.6% in June, which will allow us to talk about a decrease in price pressure in Europe's largest economy.
Trading Results the Day Before
European stock indicators rose last Wednesday amid strong financial statements of euro region companies.
As a result, the composite index of leading European companies STOXX Europe 600 increased by 0.47% to 428.12 points.
The UK FTSE 100 gained 0.57%, the French CAC 40 gained 0.75% and the German DAX gained 0.53%.
The value of securities of the Italian banking group Unicredit soared by 9%. The day before, the company reported an increase in net profit by 18.9% and revenue by 8% in annual terms.
The market capitalization of Deutsche Bank AG plunged 1.6%. At the same time, the net profit of the largest German bank grew by 46% in the second quarter, and pre-tax profit was the highest in the last 11 years amid rising income from investment banking services.
Quotes of shares of the British bank Lloyds Banking Group rose by 4.1%. The day before, the company reported an increase in pre-tax profit in the second quarter.
The value of securities of Credit Suisse Group AG rose by 1%, despite the fact that the Swiss bank announced a net loss in the second quarter of $ 1.65 billion on the back of a 29% decline in revenue.
The market capitalization of the German luxury car maker Mercedes-Benz Group AG strengthened by 3.7%. The company improved its financial performance for 2022 and reported a 6.8% increase in second-quarter revenue to 36.44 billion euros.
French food and beverage company Danone tumbled 1% on Wednesday after the company reported a 31% drop in first-half net profit.
Quotes of securities of the German energy company RWE AG rose by 2.7%. The day before, the company improved its 2022 financial outlook on the back of strong corporate reports for the first half of the year from two of its key divisions.
