European Stock Markets are Trading in the Red

Equity markets in Western Europe are trading in the red, following the dynamics of the Asian and American markets. Traders in global markets are being affected by the ongoing energy crisis. As a result of insufficient supply against the background of increased demand, prices for basic energy resources are rising to highs. This gives impetus to increase the prices of other goods and products. Thus, inflationary pressures are increasing. Many experts believe that in such conditions, central banks may decide to increase key rates, as well as significantly reduce stimulus measures.

The index of economic expectations of investors and analysts in Germany for the next six months, calculated by the research institute ZEW, in October fell to 22.3 points from 26.5 points in September. The indicator was fixed at the lowest level since March 2020, when investors were under pressure from the COVID-19 pandemic. Analysts on average expected the index to be at 24 points, writes Trading Economics.

The unemployment rate in the UK between June and August was recorded at its lowest level in 2021 – 4.5%, according to data from the National Statistical Office (ONS) of the country. The indicator was in line with analysts’ expectations.

Decline in Unemployment

The decline in unemployment comes amid the recovery of the labor market in the country after the COVID-19 pandemic. Yet the indicator remains 0.5 percentage points above the pre-pandemic level. The number of unemployed in June-August decreased by 126 thousand people compared to the same period last year – to 1.51 million. The number of employed increased by 235 thousand, to 32.42 million. Nevertheless, analysts expected that the country employed will be 243 thousand more people.

The composite index of the largest enterprises in the region Stoxx Europe 600 dropped by 0.3% and amounted to 456.14 points.

The German DAX index lost 0.5%, the French CAC 40 – 0.6%, the British FTSE 100 – 0.6%. Spain’s IBEX 35 and Italy’s FTSE MIB are down 0.1% and 0.3%, respectively.

European technology stocks are falling the most on the back of rising government bond yields. The leaders of the fall are the papers of the Polish operator of platforms for online trading Allegro.eu S.A. (-4.4%) and British Wise PLC (-7%) and THG PLC (-4%). The cost of the chip manufacturer STMicroelectronics N.V. is also decreasing. (-2%) and German software developer SAP SE (-0.3%).

After sustained gains amid rising oil prices, European commodity stocks also went down on Tuesday, with BP (LON: BP) losing 1.1%, Royal Dutch Shell 0.6%, Equinor 1%, ENI 1 %.