Europe: Stoxx 600 hits two-week lows on global risk-off mood, mixed earnings

EUROPEAN shares fell on Tuesday to their lowest point in more than two weeks, echoing a broader risk-off mood across global markets, as investors gauged a mixed bag of earnings reports.

The pan-European Stoxx 600 index ended down 0.3 per cent at 570.58 points, having slipped as much as 1.6 per cent earlier in the day. Most other major regional bourses were also in the red except for the UK’s FTSE 100 and Italy’s benchmark index which each edged up 0.1 per cent.

European stock markets slipped as a recent tech-fuelled rally faded and top Wall Street banks warned that equity markets could be heading for a correction of around 10 per cent to 15 per cent, underscoring growing concerns over sky-high valuations.

“The concerns raised about the US market are having an impact on broader risk sentiment towards equities,” said Richard Flax, chief investment officer at Moneyfarm.

The EU stock reaction is being driven by the general risk-off sentiment and not necessarily the same fundamental concerns as in the US, he added. “In Europe, valuations, at least versus history, are not as elevated and maybe the greater concern is about earnings growth in aggregate.”

Basic resources led sectoral declines with a 2 per cent fall, tracking weak copper prices. Tech stocks lost about 1 per cent.

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Healthcare stocks rose 0.8 per cent. Coloplast rose 4.8 per cent after its fourth-quarter margin beat expectations. Abivax was up 6 per cent.

A gauge of euro zone volatility hit its highest since Oct 17 earlier in the day. The lack of fresh official US data due to an ongoing government shutdown has clouded the outlook for the Federal Reserve’s interest rate cuts, also dampening sentiment.

Corporate third-quarter earnings were also in full swing, with LSEG data suggesting US corporate profitability outperforming European peers.

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Edenred slid 8.6 per cent after the French vouchers and benefit cards provider forecast slower earnings growth for 2026. Geberit gained 3.9 per cent after it nudged its full-year sales outlook slightly higher.

BP rose 1.3 per cent after the oil company reported a smaller-than-expected drop in third-quarter underlying profit. However, it provided no update on its Castrol lubricants unit’s sale process.

Telefonica slid 13.1 per cent after the telecoms giant said it would halve its dividend next year. Associated British Foods declined 2.9 per cent after the UK company reported a drop in annual profit and said it could separate its Primark fashion business and the food unit.

Investors waited for monetary policy verdict and commentary on the interest rate outlook by Sweden’s Riksbank later in the day. REUTERS