European Shares Edge Lower After Stocks Climb in U.S., Asia

By Scott Kanowsky

Investing.com -- European stock markets fell in early dealmaking on Wednesday, as a positive handover from Wall Street and Asia lost some steam.

By 03:15 ET (07:15 GMT), the DAX in Germany traded 0.43% lower, the CAC 40 in France slipped by 0.48%, and the U.K.'s FTSE 100 dropped 0.45%.

European equities had started the new quarter strongly, closing 3% higher yesterday, after fears over weakening global growth and aggressive monetary policy tightening weighed on their performance over much of the previous three-month period.

The declines come after weak U.S. employment data helped boost investor expectations that the Federal Reserve may begin to pull back on a recent series of interest rate hikes, which subsequently gave a lift to shares on Wall Street. Meanwhile, Asian stocks also rallied as Hong Kong's market reopened after a holiday.

Weighing on sentiment in Europe was the latest trade balance data out of Germany, which showed a narrowing in the country's surplus. The balance of exports and imports from the continent's largest economy came in at 1.2 billion euros in August, down from 3.4 billion euros in July. Exports to other European Union countries from Germany also contracted, in a possible sign of a slowdown in external demand for goods made by Germany's key manufacturing sector.

In corporate news, shares in France's STMicroelectronics NV (EPA:STM) rose after the European Commission gave the green light to Italy to provide state aid to the semiconductor manufacturer that will go towards building a silicon carbide wafer plant in Sicily.

Airline SAS AB (ST:SAS) also announced that it had made changes to contracts with 10 lessors representing 36 jets, which the company said would help it save nearly $700 million per year by 2026. Shares in the firm jumped.

In the U.K., Tesco PLC (LON:TSCO) shares were down after the grocery chain said annual profit will still fall within its target range despite lingering "uncertainties" in the trading environment due to cost inflation.

Oil prices were largely unchanged ahead of a major meeting of the Organization of Petroleum Exporting Countries and its allies later today, with reports suggesting that the oil group, known as OPEC+, will unveil a substantial slash in crude output.

The move would mark the largest cut since the COVID-19 pandemic, and comes as OPEC+ looks to give renewed support to oil prices after a drastic fall since the middle of the year.

Also impacting the energy picture in Europe was Russian gas monopoly Gazprom (MCX:GAZP), which said it will renew supplies of natural gas to Italy following the resolution of a dispute over transit flows with Austrian regulators.

By 03:53 ET, U.S. crude futures traded 0.07% lower at $86.46, while the Brent contract fell by 0.05% to $89.12.

Additionally, gold futures dropped by 0.32% to $1,724.90/oz, while EUR/USD was down 0.45% at $0.9938.