European stock markets have closed with declines. The Stoxx 600 fell by around 0.4%, affected by rising energy prices and doubts about the profitability of technology investments. The index accumulated a weekly drop of nearly 1.5%, with corporate earnings failing to offset geopolitical and financial concerns.
Luxury and industry were among the most punished segments in a session where the only sector that closed higher was energy. Among companies, Kering lost nearly 11% after reporting Gucci sales below expectations. The reaction highlighted the difficulty of sustaining the group's commercial recovery.
By indices, the IBEX 35 rose by 0.4%, while the Euro Stoxx 50 and the DAX fell by about 0.3% and 0.7% respectively. The main European references maintained a negative daily balance.
The preliminary composite PMI for the Eurozone fell from 53.1 to 51.9 points in October, below the expected 52.8. France returned to contraction territory, with a reading of 48.4 compared to 51.1 in September. The overall block maintained expansion, but with less momentum and uneven progress among countries.
In the United Kingdom, retail sales decreased by 0.4% month-on-month in September and consumer confidence fell eleven points in October, to -24. The weakness in spending contrasted with a composite PMI that improved to 53.1, leaving a more favourable reading of business activity than household consumption.
At the European close, the S&P 500 was down 0.1%, the Nasdaq rose 0.3% and the Dow Jones fell 0.9%.
US yields rose moderately after the intense flight to safety the day before. The movement did not reverse the previous adjustment. In Europe, French debt recovered some losses and its spread against Germany moderated to 170 basis points, from 177 basis points on Thursday, although it remained at elevated levels.
The yield on the 10-year German Bund was around 3.35%, with a rise of 1 basis point. In the United States, the yield on the 10-year US Treasury was around 4.99%, about 4 basis points above the previous close.
Brent rose by 3.5%, reaching 117.1 dollars per barrel. Fears of a new escalation with Iran and threats to energy facilities and maritime transport kept the risk premium elevated. The lack of diplomatic progress limited expectations for a quick normalisation of supply.
The euro lost slight ground against the dollar. The EUR/USD was around 1.120, with a decline of nearly 0.2%. The weaker reading of European PMIs added pressure on the single currency.
