Deutsche Bank AG shares were hovering near an all-time low on Wednesday, as the German financial giant got hit hard by earnings news, action which bucked overall upbeat markets elsewhere, as Europe stocks shot higher.
How did markets perform?
The Stoxx Europe 600 SXXP, -0.10% rose 0.9% to 357.38, partly retracing Tuesday’s loss of 1.6%.
A laggard, the Germany’s DAX 30 DAX, -0.69% rose 0.5% to 11,336.90, while France’s CAC 40 PX1, -0.18% jumped 1.2% to 5,029.27. The U.K.’s FTSE 100 UKX, +0.18% climbed 1.1% to 7,033.03.
Also falling behind the rest of Europe was the FTSE MIB Italy index I945, -1.47% , which fell 0.2% to 18,757.94.
The euro EURUSD, -0.6713% changed hands at $1.1405, after earlier breaking below $1.14 and touching its lowest level since mid-August, and remained down from $1.1471 late Tuesday. Sterling GBPUSD, -0.6393% fell to $1.2915, versus $1.2982 late Tuesday.
What’s driving the market?
The euro was pushed lower as the eurozone purchasing-manager index readings came in weaker-than-expected, notably in Germany where growth hit a three-year low. The European Central Bank will meet Thursday, and investors are expecting officials will reaffirm a plan to wind down quantitative easing in December and reiterate no rate rise until next summer.
Market participants will also be looking for comments on Italy’s financial situation and what risks the central bank thinks this poses for the eurozone economy. The European Commission Tuesday sent Italy back to the drawing board over its 2019 budget proposal.
Read: Italy is ‘the No. 1 risk factor in the fourth quarter’ for European investments
The pound fell amid mounting concerns that U.K. Prime Minister Theresa May could face a no-confidence vote over her handling of Brexit negotiations. May will meet the so-called 1922 Committee, made up of backbenchers on her own party who have been highly critical of the embattled U.K. leader.
A stronger pound can weigh on the FTSE 100, as the index’s multinational companies generate most of their sales in other currencies. And as well, it works the other way.
Europe stocks took a hit Tuesday, led by a rout for China markets then U.S. stocks. China stocks finished modestly higher on Wednesday, but the action remained volatile and Wall Street was pointing to a mixed open.
Stocks in focus
Deutsche Bank DB, -5.84% slid over 3% as slumping banking and trading revenue took a bite out of profits in the third quarter. Shares changed hands at €9, which if closing at that level would mark an all-time new mean the lowest-ever for the stock.
Shares of Kering SA KER, +5.10% topped the gainers list after the French luxury giant reported strong third-quarter sales at its Gucci brand, indicating no pullback from Chinese spenders.
Read: The 4 luxury retail stocks best suited to fend off a slowdown in China
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