The European stock markets closed mostly lower in Tuesday trading, with The Stoxx Europe 600 falling 0.70%. The Swiss Market Index experienced a decline of 0.30%, while France's CAC dropped by 1.05%. The FTSE in London slid down 0.52%, and Germany's DAX nudged up by a marginal 0.06%. This negative trend in the markets reflects a broader concern regarding the economic outlook across Europe.
Seasonally adjusted industrial production saw a rise of 1.8% in the euro area and 1.3% in the European Union in August compared to July, according to preliminary estimates from Eurostat, the statistical office of the EU. However, when assessed year-over-year, industrial production grew only slightly—by 0.1% in the euro area and 0.2% in the EU.
This modest growth may not be enough to alleviate concerns regarding the sustainability of the recovery in these regions. In Germany, the wholesale sales prices decreased by 0.3% in September from August and saw a 1.6% drop compared to September of the previous year, according to data released by Germany's Federal Statistical Office.
This decline in wholesale prices indicates potential softness in the manufacturing sector, which is crucial for Germany's economy. Turning to the UK, the estimates for payrolled employees saw a decrease of 35,000 between July and August. However, on an annual basis, there was an increase of 165,000 payrolled employees, according to data from the Office for National Statistics.
While this reflects a positive long-term trend, the short-term decline raises concerns about the strength of the labor market. In corporate news, UBS Group, a Swiss financial services company, is under scrutiny as the Swiss regulator FINMA has mandated that the firm must bolster its recovery and emergency plans in the event of insolvency.
This requirement aims to ensure that UBS can wind down or sell specific business segments without jeopardizing financial stability or resorting to taxpayer funds. This comes in light of the challenges faced by Credit Suisse prior to UBS's takeover. UBS confirmed in an emailed statement that it currently meets the necessary criteria for being resolvable in line with the preferred resolution strategy during a crisis. Additionally, an unidentified Deutsche Bank shareholder has proposed to sell approximately 16 million shares of the German bank, with Bloomberg reporting that a price of 16.01 euros ($17.46) per share is anticipated.
The sale is projected to yield around $279 million in gross proceeds, as estimated by Bloomberg. Deutsche Bank has not yet responded to inquiries following the normal business hours on Monday night in Germany, indicating a level of uncertainty regarding the shareholder's initiative. In a notable legal development, British pharmaceutical company GSK has filed a lawsuit against biotech firm Moderna, alleging that Moderna's COVID-19 vaccine, Spikevax, infringes upon GSK's patent rights related to messenger RNA technology.
This lawsuit highlights ongoing tensions within the pharmaceutical industry concerning intellectual property rights, which may have implications for future vaccine development and distribution..