European Stocks Lower; BMW Bucks Positive Corporate Earnings Trend

By Peter Nurse

Investing.com - European stock markets edged lower Wednesday, with investors digesting a fresh burst of corporate earnings coupled with raised geopolitical concerns.

By 04:00 AM ET (0800 GMT), the DAX in Germany traded 0.3% lower, the CAC 40 in France fell 0.1%, while U.K.’s FTSE 100 traded 0.4% lower.

Risk sentiment has been hit Wednesday by U.S. House of Representatives Speaker Nancy Pelosi's visit to Taiwan, a move that threatens to further dent Sino-U.S. relations and ramp up political tensions in Asia.

Beijing claims the island as part of its territory and strongly opposed the visit, given that Pelosi is the highest-ranking U.S. official to visit the island in 25 years.

Still, losses are minor as corporate earnings have generally been good as the second-quarter results season has progressed.

Societe Generale (EPA:SOGN) stock rose 4.3% after the French bank reported a smaller-than-expected loss during the quarter as it absorbed a 3.3-billion-euro hit following the sale of its Russia unit, helped by buoyant activity across retail and investment banking.

Infineon (ETR:IFXGn) stock rose 0.9% after the German supplier of microchips to the auto industry lifted its full-year outlook as it posted a 33% year-on-year increase in quarterly revenue.

AXA (EPA:AXAF) stock rose 4% after the French insurer posted a jump in first-half net profit as higher revenues from damages and health insurance outweighed the financial impact of the war in Ukraine.

Just Eat Takeaway (AS:TKWY) stock rose 1% after Europe's largest meals delivery company reported a smaller core loss for the first half of 2022, supporting its path to profitability.

Rolls-Royce (LON:RR) climbed 2% after the aero-engine maker said the Spanish government had approved its planned sale of ITP Aero to a private-equity-led consortium.

On the flip side, BMW (ETR:BMWG) stock fell over 5% after the German auto giant warned of a highly volatile second half, citing challenges from inflation and potential gas shortages as well as ongoing supply chain bottlenecks.

Data on Eurozone producer prices and retail sales are due later in the session, but German exports rose more than expected in June while services PMI data in Europe has generally been better than expected in July.

Oil prices fell Wednesday ahead of a key meeting of OPEC+ producers to discuss future output, weakened by a surprise rise in U.S. inventories.

Data from the industry body American Petroleum Institute, released on Tuesday, showed U.S. oil stocks rose by around 2.2 million barrels last, up from a fall of about 4 million barrels in the previous week.

This climb could point to a weakening of demand in the world’s largest consumer, and the official government inventory figures, due later on Wednesday, will also be studied carefully.

However, the major focus Wednesday will be on a meeting of the Organization of Petroleum Exporting Countries and its allies, a group known as OPEC+, set to begin later in the day.

The group had recently rolled back pandemic-era cuts to oil supply, and is now expected to keep production steady as recession fears grow, particularly with most members struggling to hit their current production targets.

By 04:00 AM ET, U.S. crude futures traded 1% lower at $93.48 a barrel, while the Brent contract was also 1% lower at $99.53.

Additionally, gold futures fell 0.4% to $1,783.30/oz, while EUR/USD traded 0.2% higher at 1.0181.