Investing.com – European stock markets started the new week on a subdued note, edging lower as investors focus on the future path of interest rates and the ongoing third-quarter earnings season. In Germany, the DAX traded 0.2% lower, while the CAC 40 in France fell 0.1% and the FTSE 100 in the U.K. dropped 0.1%.
The European Central Bank recently cut interest rates, marking the central bank’s first back-to-back rate cut since 2011. This move came as regional inflation risks are believed to be easing faster than expected. Additionally, German producer prices fell more than anticipated in September, declining 1.4% year on year, marking the 15th consecutive decline in this important inflation indicator.
In Asia, the People’s Bank of China also cut its benchmark loan prime rates by a quarter point as part of the country’s efforts to stimulate the economy with various measures.
Turning to corporate news, Swiss banking giant UBS announced plans to sell its 50% stake in credit card provider Swisscard to joint venture partner American Express. Meanwhile, Norway’s largest bank DNB agreed to acquire Swedish investment bank and asset manager Carnegie from private equity firm Altor and minority owners. French pharmaceutical company Sanofi also announced exclusive talks for the sale of a 50% controlling stake in its consumer health business Opella to U.S. private equity firm Clayton Dubilier & Rice.
On the commodities front, oil prices stabilized after sharp losses the previous week on concerns about global demand growth, particularly from China. Brent crude oil prices climbed 0.2% to $71.73 per barrel, while WTI futures traded 0.3% higher at $67.94 per barrel. Both Brent and WTI had settled lower last week, with Brent down more than 7% and WTI losing around 8% following news of China’s slowest economic growth since early 2023 in the third quarter.
Despite these challenges, sentiment improved after the Chinese central bank cut benchmark lending rates in a bid to stimulate the economy. Tensions in the Middle East also remained in focus, with Israel conducting operations against Hamas and Hezbollah, while also potentially preparing to retaliate against Iran for a strike in early October.
Overall, European markets are navigating various economic and geopolitical factors as they seek to find stability and direction in the current uncertain environment.