European stock markets closed with slight declines moderating the losses with which they started the session. The declines were led by technology and industrial companies most exposed to the development of artificial intelligence, while defensive sectors, such as food, health, and personal care, recorded the best performance.
Notably, the fall of Swiss company ABB (-5.0%), one of the companies exposed to AI, despite reporting Q3 results above expectations. The market continues to question the valuations of AI-linked companies, amid doubts about the profitability of investments and, especially, their financing.
Among indices, the rebound of the IBEX 35 of 0.3% stands out, recovering losses of nearly 1% in the morning. Meanwhile, the Euro Stoxx 50 fell by 0.4% and the German DAX by 0.1%.
The session began with significant declines in technology and industrial companies exposed to AI, in the context of fears that final demand would not justify investments in data centres. The turning point came with the opening of Wall Street, with a rebound in semiconductors that spread to the overall market.
Additionally, market sentiment was boosted by the moderation of oil prices amid unconfirmed reports that Pakistan had made a new proposal to reactivate negotiations between Iran and the US.
At the European close, the S&P 500 was up 0.4% and the Nasdaq up 0.3%.
Fixed Income
Bond markets recorded yield declines amid falling oil prices and hopes for a new attempt at negotiations. In the Eurozone, declines have been widespread, although the risk premium for France rose again to a new high of 150 bp.
The yield on the German 10-year Bund fell by 6 bp to 3.40%. In the United States, the yield on the 10-year US Treasury dropped by 3 bp to 5.11%.
Commodities and Currencies
The Brent crude oil price fell by around 1.1%, settling at 108.3 dollars per barrel due to unconfirmed news of a new proposal from Qatar and Pakistan to reactivate negotiations.
In Europe, natural gas TTF started the session with a new high since 2022 above 90 EUR/MWh, before ending down 2.4% following news of the new negotiation attempt.
· The EUR/USD rose slightly to 1.123, near its highest level in three weeks.
