European stocks close lower

On Friday, the key European stock indices declined amid weak corporate earnings reports for the third quarter of 2022 from top European companies.

At the time of writing, the composite indicator of Europe's leading companies STOXX Europe 600 lost 0.37% and fell to 407.03 points.

The French CAC 40 dropped by 0.25%, the German DAX sank by 0.57%, and the British FTSE 100 went down 0.37%.

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Top gainers and losers

The stocks of European energy companies Eni and Equinor soared by 2.7% and 4% respectively amid a significant increase in net income and revenue at the end of the third quarter. The key reason for positive results of the companies was a permanent rise in energy prices in the EU.

The stocks of German automobile concern Volkswagen dropped by 4%. At the end of July-September, the company's profits sank by 27% to 2 billion euros due to the suspension of operations in Russia.

The market capitalization of European aerospace corporation Airbus SE dropped by 0.3%. At the same time, the company increased its net profit by 65% and revenues by 27% in the third quarter. Moreover, Airbus's management confirmed the forecast. According to it, the company will deliver about 700 aircraft to customers till the end of 2022.

The stocks of German luxury carmaker Porsche AG fell by 2.9% despite the report of a 40% rise in operating profit and revenue from January to September 2022.

The shares of British bank NatWest Group Plc plummeted by 8.5%. At the same time, the company increased pretax profit to 1.09 billion pounds in the third quarter from 976 million pounds over the same period in 2021. However, the final figure was lower than preliminary market expectations of 1.24 billion pounds.

The stocks of Austrian oil and gas group OMV soared by 7.6%. The company recorded an operating profit of 3.5 billion euros in July-September and announced plans to pay a special dividend of 2.25 euros per share.

The market capitalization of French drugmaker Sanofi increased by 1.2%. Earlier, the company predicted a faster rise in profits in 2022 amid high demand for its flu drug.

Market sentiment

In addition to quarterly reports from top European companies, on Friday market participants analyze statistics on the EU countries. The German economy grew by 0.3% in July-September compared to the second quarter and by 1.2% in annual terms. At the same time, analysts forecasted a decrease of the first indicator by 0.2% and an increase of the second indicator by 0.8%.

In the third quarter of 2022, France's gross domestic product rose by 0.2% quarter-on-quarter and by 1.2% year-on-year. Meanwhile, the Consumer Price Index soared by 7.1% year-on-year in October after increasing by 6.2% in September. In this case, previously surveyed experts assumed the acceleration of inflation only to 6.4%.

In July-September, the Spanish economy grew by 0.2% in quarterly terms and by 3.8% in annual terms. Analysts on average predicted a rise of 0.3% and 4% respectively.

Meanwhile, in October inflation in Spain totaled 7.3%, the lowest since January 2022. Notably, the figure was at 9% in September. Consumer price growth in October was much weaker than the 8.4% increase expected by the market.

Previous trading results

On Thursday, European stock indices closed mixed. At the end of trading, the composite indicator of Europe's leading companies STOXX Europe 600 rose by 0.03% to 410.19 points. The French CAC 40 was down 0.51%, the German DAX gained 0.12%, and the British FTSE 100 added 0.25%.

The stocks of Swiss bank Credit Suisse Group AG plummeted by 18.6%. On Thursday, the company's management announced plans to raise $4.07 billion in capital and sell part of its investment business. In addition, the bank said it might lay off 9,000 employees. As for the latest financial statements of Credit Suisse, its net loss amounted to $4.09 billion for the third quarter, while its quarterly revenue fell by 30%.

The stocks of British bank Lloyds sank by 0.5% despite a decline of pretax profits by 26% in July-September due to write-offs following downgrading macroeconomic forecasts.

The market capitalization of Spanish bank Banco de Sabadell fell by 2.3% despite an increase in net profit to 317 million euros in the third quarter 2022 from 149 million euros in 2021. Moreover, the day before the company's management approved a dividend payout ratio to 40% of profits.

The stocks of British FMCG supplier Unilever dropped by 0.1%. At the same time, the company increased its turnover in the previous quarter by 17.8% due to the fact that higher prices compensated for lower sales.

The stocks of French oil and gas giant TotalEnergies rose by 3%. In July-September, the company increased its net profit by 43% in annual terms amid permanent increase in oil and gas prices.

Quotes of British-Dutch energy company Shell soared by 5.9%. In the previous quarter, Shell cut its net profit nearly threefold. However, the adjusted figure was better than preliminary market expectations. In addition, the energy giant announced plans to buy back shares worth up to $4 billion and raise dividends by 15%.

The market capitalization of German air carrier Deutsche Lufthansa AG added 3.2% amid the release of a quarterly report on net profit and nearly doubled revenues.

The stocks of Franco-Italian chipmaker STMicroelectronics sank by 4.8%. Earlier, the company's management predicted a decline in sales growth in the last 6 months of 2022.

The stocks of Finnish oil refining company Neste Oyj collapsed by 8% after the publication of weaker operating indicators for July-September than analysts had predicted.

On Thursday, European investors focused on fresh eurozone statistics. According to the research company GfK, the Consumer Confidence Index of Germany in November slightly rose from its all-time low and amounted to -41.9 points against the revised -42.8 points in October. The increase in the index was recorded for the first time after five months of decline. Currently, German authorities are struggling with permanently rising energy prices and slowing growth.

Meanwhile, the unemployment rate in Spain rose to 12.67% in the third quarter from 12.48% in the second quarter.


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