LONDON – European stocks saw choppy trading on Wednesday, with the initial negative sentiment giving way to a marginally positive tone for the broad index, though key national benchmarks remained pressured as a wave of third-quarter earnings reports hit the market.
As of late morning trading (11:13 a.m. London time), the pan-European Stoxx 600 index had edged just above the flatline. However, major national indices were mixed and volatile. Germany’s DAX dipped into negative territory, France’s CAC 40 was down about 0.2%, and Italy’s FTSE MIB posted losses exceeding 0.4%. In a relative outlier, the U.K.’s FTSE 100 was up a notable 0.86%.
Key Stock Movers and Corporate News
L’Oréal was a significant decliner, with shares falling over 6% after its quarterly results disappointed investors. While the French cosmetics giant posted 3.4% like-for-like sales growth, this was tempered by sluggish North American performance and the impact of tariffs, overshadowing solid growth in China. L’Oréal is currently set to acquire the beauty business of Gucci owner Kering.
Luxury peers also faced headwinds. Hermès, the maker of the Birkin bag, saw its stock slide 3.8% despite reporting strong year-on-year sales growth. Its third-quarter sales of €3.9 billion marked a 10% jump at constant exchange rates. Its key leather goods and saddlery division posted a “remarkable” 13% constant currency sales boost. However, the overall sales figure fell short of market expectations, triggering the sell-off.
On the positive side, British lender Barclays surged over 4% after it raised its guidance and announced a new £500 million ($667 million) share buyback program alongside its strong third-quarter earnings.
Italian bank UniCredit reported a record third quarter, with net profit of €2.6 billion ($3.02 billion), beating the company-compiled consensus forecast of €2.4 billion. Despite the strong beat, its shares were last seen 1.4% lower. CEO Andrea Orcel commented on the bank’s strategy, noting UniCredit has not “given up” on German lender Commerzbank and would likely raise its stake in Greece’s Alpha Bank to around 30%.
Other Corporate and Economic Highlights
- Heineken, the world’s second-largest brewer, saw its shares rise 0.8% despite expecting to sell less beer next year. The company narrowed its full-year guidance to the lower end of its 4% to 8% volume forecast after macroeconomic challenges softened demand, causing volumes to drop 2.3% in Q3.
- Randstad, the world’s largest recruitment firm, was among the biggest laggards on the Stoxx 600, shedding 7.7% as it reported a year-on-year drop in revenue, operating profit, and net income, with revenue falling 3.4% to €5.8 billion in the third quarter.
- ITV also dropped 8.5%, reacting to news that its largest shareholder, Liberty Global, sold half of its stake in the U.K. broadcaster.
- Novo Nordisk continued its decline, falling 2.8%, as the market reacted to Tuesday’s news of board members stepping down following a governance clash with the controlling shareholder, the Novo Nordisk Foundation.
- The U.K.’s latest inflation figures came in flat at 3.8% in September, defying expectations for a slight rise.
Further earnings reports are scheduled throughout the day from companies including Reckitt Benckiser Group, DNB Bank, Svenska Handelsbanken, Aker, and SAP.
Geopolitical Context
The general positive momentum from Tuesday’s session appeared to stall, with some market commentators suggesting investors are weighing the increasingly low prospect of a near-term peace deal in Ukraine. An expected meeting between U.S. President Donald Trump and Russian leader Vladimir Putin in Hungary to discuss a resolution to the conflict has been put on hold, according to reports. This comes amid recent mixed signals from the Trump administration regarding its support for Ukraine.
