European bourses tracked moderately higher midday Thursday as traders digested recent positive earnings reports and signals from the European Central Bank that rate cuts are on the table. Several European blue-chip companies, including automaker Renault, consumer goods giant Unilever, and luxury brand Hermès, have posted better-than-expected quarterly results, topped by Tesla's (TSLA) strong earnings report filed overnight. On the continent, oil and tech stocks led the gainers, while bank and retail issues lagged in performance. Investors also eyed Wall Street futures that were mostly signaling green, countered by soft closes overnight on Asian exchanges.
Economic news indicated that Eurozone private-sector activity mildly contracted in October, according to S&P Global. The flash Eurozone composite purchasing managers index (PMI) for October posted at 49.7, which is just slightly up from 49.6 in September. However, this figure remains below the critical 50-marker that separates growth from contraction.
In specifics, the services PMI fell to 51.2 in October from 51.4 in September, whereas the manufacturing PMI lifted to 45.9 from 45.0, as reported by S&P Global. The pan-continental Stoxx Europe 600 Index experienced a rise of 0.5% mid-session, powered by robust performances in various sectors. Specifically, the Stoxx Europe 600 Technology Index was up 0.7%, although the Stoxx 600 Banks Index experienced a slight loss of 0.1%.
Energy stocks also displayed strength, with the Stoxx Europe 600 Oil and Gas Index up by 1.1%, while the Stoxx 600 Europe Food and Beverage Index inclined by 0.6%. Meanwhile, the REITE, a European REIT index, rose 0.3%, contrasting with the Stoxx Europe 600 Retail Index that declined by 0.2%. When looking at national market indexes, Germany's DAX was up by 0.7%, and the FTSE 100 in London increased by 0.4%.
The CAC 40 in Paris also saw gains of 0.7%, while Spain's IBEX 35 gained a modest 0.1%. Yields on benchmark 10-year German bonds were observed to be lower, resting near 2.26%. In the commodities market, front-month North Sea Brent crude oil futures rose by 1.1%, reaching $75.77 per barrel. The Euro Stoxx 50 volatility index demonstrated a decline of 2.1% to 18.59, indicating below-average volatility for European stock markets in the next 30 days, which is viewed as a positive signal.
A reading above 20 suggests potential turbulence in the markets ahead, while a figure below 20 typically implies more stable exchanges..