By Investing.com – European stock markets retreated Wednesday despite a positive growth surprise, as investors digested more quarterly earnings results ahead of the UK budget.
At 07:40 ET (11:40 GMT), the DAX index in Germany traded 0.9% lower, the CAC 40 in France fell 1.4% and the FTSE 100 in the U.K. dropped 0.4%.
UK budget among many risk events
The last trading day of October has started on a cautious note as investors hunker down ahead of the various risk events, including the first budget from Britain’s Labour government after 14 years of Conservative rule.
Investors are wary of what may be the biggest tax hikes in three decades, as well as increased borrowing, given the Labour Party’s pre-election promises to fix the country’s struggling public services.
On the economic front, there was some encouraging news as the eurozone economy grew faster than expected last quarter.
Gross domestic product in the 20 countries sharing the euro grew by 0.4% in the third quarter from the previous three months, beating expectations for 0.2%, and expanded by 0.9% from a year ago, compared with 0.6% three months ago.
The biggest surprise came from Germany, with the eurozone’s largest economy expanding by 0.2%, compared to an expected small contraction, while France and Spain also showed unexpected resilience.
Across the pond, the US third-quarter growth figures are likely to offer up more solid growth, with the world’s largest economy set to maintain a robust pace of growth.
UBS impresses with Q3 profit
Turning to the corporate sector, Wednesday was another busy day for earnings and business updates.
UBS (SIX:UBSG) stock fell 2%, handing back earlier gains after the Swiss banking giant posted robust third-quarter profit after completing the first wave of client migrations from Credit Suisse since acquiring its rival last year.
Standard Chartered (OTC:SCBFF) stock rose 3% after the UK lender’s quarterly profit topped market estimates, and said it will double down on its wealth business.
Aston Martin (LON:AML) stock rose 0.2% after the luxury carmaker reported a smaller-than-expected third-quarter loss on Wednesday and reaffirmed its annual forecast.
Telenor (OL:TEL) stock rose 5.8% after the Norwegian telecom operator raised its full-year outlook after reporting third-quarter earnings slightly ahead of market expectations.
Volkswagen (ETR:VOWG_p) stock rose 1% despite the German automaker reporting a 42% drop in third-quarter operating profit, as it undertakes an unprecedented restructuring that could include thousands of job cuts.
Capgemini (EPA:CAPP) stock fell 7% after the French IT consulting group cut its 2024 revenue target for the second time this year, citing continued weakness in some of its markets.
Across the pond, Alphabet (NASDAQ:GOOGL) will be in the spotlight after the Google parent said its AI investments were “paying off” as its earnings and revenue came in ahead of analyst’s expectations.
Fellow tech giants Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) are due to release earnings after the close Wednesday.
Crude gains after API draw
Oil prices rose Wednesday, recouping some of the recent losses as industry data showed an unexpected draw in U.S. inventories.
By 07:40 ET, the Brent contract climbed 1.2% to $71.58 per barrel, while U.S. crude futures (WTI) traded 1.2% higher at $68.04 per barrel.
Data from the American Petroleum Institute showed U.S. oil inventories fell 0.57 million barrels in the past week, compared with expectations for a build of 2.3 million barrels.
The official inventory data is due later on Wednesday, and if this data matches the API numbers then it could indicate supplies in the world’s biggest fuel consumer were somewhat tight.