European stocks fall as UK market turmoil continues
European stocks closed lower, with the blue-chip Stoxx 600 tentatively ending the session down 1.8% as weak economic sentiment and volatility in the UK bond market continued to weigh.
Auto stocks fell 5%, with a French car company Faurecia down 14.7%.
UK stocks Barratt Development — a real estate developer — and a retailer Next both fell around 12%.
—Jenni Reid
BOE spends another $1.55 billion on long-term gilts
The Bank of England bought £1.415 billion ($1.55 billion) worth of government bonds with maturities over 20 years, Reuters reported.
It’s the second day of the bank’s bond-buying program, launched to stabilize market volatility after the announcement of a government budget that saw a historic rise in bond yields, which are moving in the opposite direction prices. It bought £1.025 billion worth of gilts on Wednesday.
The start of the scheme sent gilt prices soaring, although they started falling again after Prime Minister Liz Truss said in a series of interviews that she would stick to her policy.
The 10-year gilt yield traded at 4.121% at 3:20 p.m. London time.
—Jenni Reid
Stocks on the move: Rational up 15%, Barratt Developments down 12%
Rational stocks jumped more than 15% by mid-afternoon to top the Stoxx 600, after the German oven and combi-oven maker raised its revenue and profit forecast for 2022.
At the bottom of the European blue chip index, British property developer Barratt Developments fell more than 12%.
-Elliot Smith
Semiconductor shortage expected to ease in 2024, says Porsche CFO
Semiconductor shortages will continue to affect Porsche throughout 2023, according to Arno Antlitz, Volkswagen’s chief financial officer, but supply is expected to improve the following year.
“We expect a better supply in 2023, but we don’t expect the easing of shortages to happen until 2024,” Antlitz told CNBC’s Annette Weisbach.
The comments came as Antlitz reflected on Porsche shares making their Frankfurt stock market debut.
—Hannah Ward-Glenton
The economic climate in the eurozone continues to deteriorate
The European Commission’s economic confidence indicator, which aggregates business and consumer confidence surveys, fell to 93.7 in September from 97.3 in August, its lowest point since November 2020.
Confidence plummeted across all economic sectors amid sharply rising inflation expectations, despite the European Central Bank’s pledge to raise interest rates to curb soaring prices.
-Elliot Smith
Porsche shares rise in Frankfurt market debut
Porsche the shares rose nearly 2% above its IPO price when it debuted Thursday, in what is being billed as one of the biggest public offerings ever in Europe.
Shares of the luxury automaker initially traded at 84 euros ($81) at the start of the day.
The shares had been valued at the high end of their range on Wednesday night, taking the company’s value to 75 billion euros.
Read CNBC’s full coverage here.
—Hannah Ward-Glenton
Stocks on the move: Rational up 12%, Barratt Developments down 9%
Rational Shares jumped more than 12% in early trade to top the Stoxx 600 after the German oven and combi-oven maker raised its revenue and profit forecast for 2022.
At the bottom of the European blue chip index, the British property developer Barratt Developments fell more than 9%.
CNBC Pro: Analyst Says This FAANG Stock Is An Evergreen Gainer — And Investors Should Buy The Dip
Tech stocks have had a tough year so far, but an analyst at Rosenblatt Securities thinks the selloff is an opportunity for long-term investors to buy the dip.
“Stay away from losers,” he said, recommending “winners in the various age-old battles and evolutionary battles” in technology.
Pro subscribers can learn more.
— Zavier Ong
Stocks could continue this ‘oversold bounce’ over the next few days, according to Wells Fargo’s Harvey
Wells Fargo’s Chris Harvey expects stocks to continue their upward move.
“The spike in short-term interest, the retail bias and BOE action all suggest stocks will continue their oversold rebound over the next few days,” he said in a statement on Wednesday. note to customers.
Stocks hit new lows earlier in the week, with the S&P 500 recording another bear market. The selloff was triggered by the Fed’s latest rate decision last week, which some investors said sent the market into oversold conditions.
As the cost of capital rises and prices approach record highs, the consensus is growing that a Fed-led recession is inevitable, Harvey said.
“We view a recession as a car accident,” he wrote. “You never know how bad it will be, but there’s almost no ‘better than expected’ outcome – so policy makers have to be careful what they wish for.”
— Samantha Subin
10-year Treasury yield falls the most since 2020
The return of the benchmark index 10-year cash flow The rating fell the most since 2020 on Wednesday, despite briefly overshooting 4% earlier in the session, after the Bank of England announced a bond-buying plan to stabilize the pound.
The 10-year Treasury yield last fell 23 basis points to 3.733%, the highest since 2020.
It hit a high of around 4.019%, a key level that was the highest since October 2008, earlier in the day before erasing those gains.
Yields and prices move in opposite directions. One basis point is equal to 0.01%.
European markets: here are the opening calls
European markets are heading for a higher open on Thursday after U.S. Federal Reserve Chairman Jerome Powell said smaller interest rate hikes could begin in December.
Britain’s FTSE index is expected to open 21 points higher at 7,604, Germany’s DAX up 170 points at 14,580, France’s CAC up 57 points at 6,788 and Italy’s FTSE MIB up 228 points at 24. 851, according to data from IG.
Data released includes Eurozone unemployment and final PMI figures for October and German retail sales for October.
—Holly Ellyatt
