Investing
European stocks snap three-day gains on worries over U.S. vote, inflation
Published by Jessica Weisman-Pitts
Posted on November 9, 2022
3 min readLast updated: February 3, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on November 9, 2022
3 min readLast updated: February 3, 2026
By Shreyashi Sanyal and Ankika Biswas
(Reuters) -European shares snapped a three-day advance on Wednesday, weighed down by economically sensitive stocks, amid uncertainty over the outcome of the U.S. midterm elections and on concerns about rising inflation.
“There’s been a risk-on mood in markets over the past few sessions, and today we just saw a bit of a pullback, and of course the uncertain results in the midterm election is weighing on the U.S. markets and also dragging down European markets,” said Andrea Cicione, head of research at TS Lombard.
“Markets generally like the economy to be left to its own devices. And the split between the President and Congress is likely to yield that kind of result.”
The pan-European STOXX 600 index closed 0.3% lower after clocking an eight-week closing high in the prior session.
Energy stocks slipped 1.8%, owing to falling oil prices following higher-than-expected U.S. crude stockpiles and concerns that a rebound in COVID-19 cases in top importer China would hurt fuel demand.
Other cyclical sectors such as travel & leisure, miners and banks fell between 1.1% and 2.1%.
The latest developments showed Republicans made modest gains in U.S. midterm elections and Democrats performed better than expected, but control of Congress and the future of President Joe Biden’s agenda were still unclear on Wednesday.
Markets were largely pricing in a Republican victory which could lead to a split Congress, viewed as a more favourable outcome for financial markets.
Wall Street’s main indexes fell amid uncertainty around the outcome of the tightly contested election. [.N]
There were also concerns about inflation. An European Central Bank survey showed that inflation expectations among euro zone consumers continued to rise in September, even as economic growth and income forecasts declined markedly.
Investors awaited Thursday’s U.S. consumer price data for October as well, to determine if the Federal Reserve’s aggressive tightening policy has helped rein in inflation.
Among major stocks, Germany’s Commerzbank shed 7.2%, weighing down the banks index by 1.1%.
The lender said its net profit fell by 52% in the third quarter in a better-than-expected outcome, helped by higher interest rates, though it had previously flagged problems at a Polish unit weighed.
Dutch bank ABN Amro rose 4.4% as it beat analysts’ expectations, saying its net profit had more than doubled to 743 million euros ($747.98 million) in the third quarter.
Britain’s Marks & Spencer slipped 3.4% after warning of a “gathering storm” of higher costs and pressure on household budgets.
German speciality chemicals maker Lanxess dropped 2.4% as it cut the top end of its forecast range for annual profit on weaker demand.
(Reporting by Shreyashi Sanyal and Ankika Biswas in Bengaluru; Editing by Arun Koyyur and Bernadette Baum)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI) or the Producer Price Index (PPI).
Financial markets are platforms where buyers and sellers engage in the trade of assets such as stocks, bonds, currencies, and derivatives. They facilitate the raising of capital, transfer of risk, and international trade.
Economic growth refers to the increase in the production of goods and services in an economy over a specific period, usually measured by the rise in Gross Domestic Product (GDP).
A central bank is a national institution that manages a country's currency, money supply, and interest rates. It oversees the banking system and implements monetary policy to achieve economic stability.
A stock index is a statistical measure that reflects the composite value of a selected group of stocks. It is used to gauge the performance of the stock market or a specific sector.
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