European bourses experienced notable declines on Wednesday afternoon as traders exhibited caution following disappointing earnings reports from key companies, coupled with ongoing tensions in Eastern Europe and the Middle East. Shares in Capgemini suffered a 7.5% drop mid-session after the renowned Paris-based IT consulting group lowered its revenue forecast for 2024.
Despite this, property stocks maintained a relatively stable position across the continent, while technology and banking shares faced downward pressure. Investors turned their attention towards Wall Street futures, which indicated a modestly positive, yet overall lower finish for Asian exchanges overnight.
Meanwhile, Eurostat reported that the seasonally adjusted gross domestic product for the euro area rose by 0.4% in the third quarter, with the broader European Union following closely with a 0.3% increase. Year-over-year comparisons showed a 0.9% increase in GDP for both the euro area and the EU during the same period.
The Stoxx Europe 600 Index, which serves as a benchmark for the market, was down 1.1% at midday. More specifically, the Stoxx Europe 600 Technology Index fell by 1.8%, while the Stoxx 600 Banks Index declined by 1%. In the energy sector, the Stoxx Europe 600 Oil and Gas Index recorded a 0.3% dip, and the Europe Food and Beverage Index decreased by 1.5%.
The European REIT index, known as the REITE, slightly weakened by 0.1%, while the Retail Index of the Stoxx Europe 600 receded by 0.2%. On national indexes, Germany’s DAX recorded a decline of 0.8%, and the FTSE 100 in London fell by 0.4%. The CAC 40 in Paris depreciated by 1.5%, with Spain's IBEX 35 also down by 0.8%.
Benchmark yields on 10-year German bonds saw a decrease, settling near 2.31%. In the commodity markets, front-month North Sea Brent crude oil futures rose by 1.2%, reaching $71.58 per barrel. The Euro Stoxx 50 volatility index, a measure of market uncertainty, increased by 3.6% to a reading of 19.67, suggesting marginally below-average volatility for the upcoming month.
A reading surpassing 20 generally indicates more turbulent market conditions ahead, while numbers below 20 reflect a calmer outlook for stock exchanges..