European stocks moved into negative territory on Wednesday after giving up earlier gains, as oil prices rebounded and investors assessed economic data from Germany, France and the UK.
Brent crude futures for December delivery rose about 1.8% to $97.90 a barrel. Oil markets remained volatile amid continued uncertainty over U.S.-Iran negotiations and the reopening of the Strait of Hormuz.
The UK’s FTSE 100 outperformed major continental indices following stronger-than-expected GDP data, rising 0.2%. Germany’s DAX declined 0.2%, while France’s CAC 40 fell 0.4%.
German Stocks Mixed as Unemployment Rises
In Frankfurt, Commerzbank fell about 2.7%. Vonovia, Siemens Healthineers, Allianz, SAP and Siemens declined between 0.8% and 1.6%.
Zalando, Porsche Automobil Holding and BMW gained between 3.3% and 3.5%. Volkswagen rose nearly 2%, while Fresenius, MTU Aero Engines, Mercedes-Benz, RWE and BASF advanced between 1% and 1.6%.
Data from Germany’s Federal Employment Agency showed the number of unemployed people increased by 12,000 in September from August, compared with an expected rise of 1,000. Unemployment had increased by 5,000 in August.
The unemployment rate remained unchanged at 6.4% in September, in line with expectations.
Separate data from Destatis showed the adjusted unemployment rate remained at 4% in August. The number of unemployed people stood at 1.76 million, an increase of 9,000 from July, according to the labour force survey.
The unadjusted unemployment rate increased to 4.3% in August from 3.9% a year earlier.
German Retail Sales Recover in August
German retail sales increased 1.3% month on month in August, reversing a 3.2% decline in July, according to Destatis.
The increase was below the 1.6% growth forecast by economists.
On an annual basis, retail sales declined 0.4%, compared with a 2.2% decrease in July.
The economic figures accompanied a mixed session for German equities, with the DAX trading 0.2% lower.
French Inflation Accelerates to 3%
In Paris, EssilorLuxottica gained 2%, Stellantis advanced 1.6% and Pernod Ricard rose 1.5%. Renault added 1.1%, while Hermes International, Kering, Air Liquide and Sanofi recorded moderate gains.
Teleperformance fell about 6%. TotalEnergies, Publicis Groupe, AXA, BNP Paribas, Bouygues, Carrefour, Vinci, Unibail Rodamco, Dassault Systemes, Eurofins Scientific, Engie and Edenred declined between 1% and 2.5%.
Preliminary data from French statistical office INSEE showed consumer price inflation accelerated to 3% in September from 2.4% in August, exceeding economists’ forecast of 2.8%. The 3% rate was last recorded in February 2024.
EU-harmonised inflation increased to 3.4% from 2.6% in August, above the expected rate of 3%.
On a monthly basis, French consumer prices declined 0.3% after increasing 0.7% in August. Economists had forecast a 0.5% decline.
The harmonised index of consumer prices fell 0.4% month on month, reversing the previous month’s 0.7% increase and compared with expectations for a 0.5% decline.
French Producer Price Inflation Rises
Separate INSEE data showed producer price inflation in France’s domestic market increased to 4.8% from 3.5% in July.
On a monthly basis, producer prices rose 1%, following an increase of 1.3% in July.
The inflation figures came as the CAC 40 traded 0.4% lower during Wednesday’s session.
FTSE 100 Rises After UK GDP Revision
UK equities outperformed their German and French counterparts, with the FTSE 100 gaining 0.2%.
Antofagasta, Reckitt Benckiser, SSE, National Grid, Marks & Spencer, Severn Trent and United Utilities advanced between 2% and 3%.
Kingfisher, British Land, JD Sports Fashion, Croda International, ICG, Anglo American Plc, Spirax Group and Rio Tinto also recorded notable gains.
The Sage Group, Ithaca Energy, Relx, Experian, BT Group, BP, Shell, LSEG and Rolls-Royce Holdings declined between 0.9% and 2%.
Revised figures from the Office for National Statistics showed the UK economy expanded 0.5% quarter on quarter in the second quarter, above the previous estimate of 0.4%. GDP had increased 0.6% in the first quarter.
Services output grew 0.6% during the second quarter, while construction increased 0.8%. Production declined 0.1%.
On the expenditure side, real household final consumption expenditure increased 0.3%, while government spending declined 0.5%.
Oil Rebounds Amid Strait of Hormuz Uncertainty
Brent crude futures for December delivery climbed approximately 1.8% to $97.90 a barrel.
Oil prices remained sensitive to developments surrounding U.S.-Iran negotiations and the prospect of reopening the Strait of Hormuz.
The rebound in crude prices accompanied declines in Germany’s DAX and France’s CAC 40, while stronger revised UK GDP data coincided with a modest gain for the FTSE 100.
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