In recent trading, European stock markets experienced a downturn as key indices registered losses. The Stoxx Europe 600 saw a decrease of 0.18%, while the Swiss Market Index fell 0.37%. Additionally, France's CAC lost 0.24%, London’s FTSE was down by 0.07%, and Germany’s DAX declined by 0.23%. This broad-based decline reflects increasing concerns about economic conditions across the continent. A significant indicator of the economic landscape, the GEP Global Supply Chain Volatility Index for Europe fell to a nine-month low of -0.74 in September, a shift from -0.53 in August.
According to S&P Global, which publishes the index, this drop signals an intensifying industrial downturn, exacerbated by challenging macroeconomic factors. Major European manufacturers are grappling with competitive pressures from China, soaring energy costs, and a sluggish eurozone economy. On a more positive note, Germany saw a 1.6% increase in retail sales in August compared to July, both in price-adjusted and nominal terms, with a year-on-year comparison yielding a 2.1% rise in real terms and a 3.1% increase in nominal terms, according to preliminary results from the Federal Statistical Office. In Italy, the seasonally adjusted industrial production index showed a modest increase of 0.1% in August compared to July.
However, when looking at the year-over-year data adjusted for the calendar, there was a decline of 3.2%, indicating potential challenges in the industrial sector. Corporate news is also shaping the market sentiment. British pharmaceutical company GSK's shares surged over 3% in London after the company announced that it will pay $2.2 billion to settle 93% of Zantac state court product liability cases in the U.S., signaling a resolution to ongoing litigation issues. Meanwhile, Unilever completed the sale of its Russian subsidiary to Arnest Group, a local manufacturer specializing in perfume, cosmetics, and household products.
The CEO, Hein Schumacher, confirmed the deal, although financial terms remain undisclosed. This move marks the complete divestment of Unilever's business operations in Russia, including four factories and activities in Belarus. Ryanair announced plans to reduce its traffic in Germany by 12% for the summer of 2025, leading to the cancellation of 22 routes and a reduction of 1.8 million available seats.
The Irish airline cited increasing taxes and fees as the driving force behind this decision, which will also lead to the closure of bases in Dortmund, Dresden, and Leipzig, along with a significant 60% reduction in offerings from Hamburg. Ryanair warned that this cutback could have devastating impacts on jobs, tourism, and regional connectivity. In the finance sector, HSBC CEO Georges Elhedery is reportedly planning to lay off senior bankers.
This decision aims to cut costs by as much as $300 million, as reported by the Financial Times. The response from HSBC regarding this development has yet to be disclosed. Additionally, French oil and gas company TotalEnergies announced it has signed a charter contract for a newly constructed liquefied natural gas bunker vessel with Spanish shipowner Ibaizabal, although no financial terms surrounding this agreement were made public.
This reflects ongoing investment in energy infrastructure, even amidst broader economic volatility..