Europe's Stoxx 600 subdued as earnings and oil prices weigh

[BENGALURU] European shares were subdued on Wednesday (Oct 28) after several disappointing earnings reports, coupled with higher oil prices, exacerbated investor unease ahead of a rate decision from the central bank.

The pan-European Stoxx 600 index rose 0.07 per cent to 644.14 points. The media and mining indices were among the biggest laggards.

The muted moves will set the tone ahead of the European Central Bank’s (ECB) policy decision on Thursday. Investors widely expect a rate hold but will still look for clues on the trajectory going forward.

With the yields on French sovereign bonds high, markets will also be watching for signs of a dovish tone from the ECB in response to the country’s turmoil.

“We don’t think we are there yet. But equally, we admit that a more dovish tone on further tightening would probably be the first line of defence against more bond volatility,” ING economists wrote.

Thyssenkrupp was the biggest loser on the Stoxx 600 following a 17 per cent decline, after a muted market debut for its materials trading division.

Dutch payments platform Adyen was the second biggest loser, down over 13 per cent after it lowered its core earnings margin target for 2026.

London stocks marginally higher

The UK’s FTSE 100 index ended a touch higher after the British finance minister John Healey unveiled his first budget.

Among financial stocks, Deutsche Bank gained about 4 per cent after reporting a surprise jump in third-quarter profit. Standard Chartered rose 2.4 per cent after hiking its full-year growth and profitability targets.

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On the other hand, Spain’s Santander fell 5.6 per cent after third-quarter results as weaker earnings in Brazil weighed, leading the bank-heavy Spanish benchmark down 1.5 per cent, the most among peers.

UBS dipped 0.6 per cent after posting a third-quarter net profit roughly in line with expectations.

However, analysts remained constructive on the sector.

“We still expect the banks to remain in a good place in terms of their business strength because we have not seen the economies weaken as much as we would have expected them to weaken,” said Ipek Ozkardeskaya, senior analyst at Swissquote.

Oil prices rose 1.7 per cent, dampening risk appetite, while a drop in copper prices pulled miners lower. Media stocks also fell, dragged down by a 4 per cent decline in Universal Music Group .

Among other earnings, Stellantis added over 15 per cent after posting a slight increase in operating income in the third quarter, leading gains on the automobile index, which rose 1.3 per cent.

Valmet advanced 7.5 per cent after quarterly earnings jumped.

Italian shares rose 0.4 per cent after the government approved its 2027 budget. REUTERS