European bourses tracked modestly higher midday Tuesday as traders digested a solid earnings season, while considering global geopolitics and the upcoming US national election. Tech and retail stocks were at the forefront of these limited gains, whereas oil issues lagged behind. Investors also took note of Wall Street futures signaling a positive outlook, complemented by overnight gains on Asian exchanges.
S&P Global reported that the UK services purchasing managers index (PMI) was measured at 52.0 in October, a slight decline from 52.4 in September. Nevertheless, this figure remains above the critical 50-point threshold that demarcates growth from contraction. During the mid-session, the pan-continental Stoxx Europe 600 Index recorded a modest increase of 0.1%.
Specifically, the Stoxx Europe 600 Technology Index rose by 0.2%, while the Stoxx 600 Banks Index also gained 0.1%. Conversely, the Stoxx Europe 600 Oil and Gas Index experienced a slight decrease of 0.1%, although the Stoxx 600 Europe Food and Beverage Index saw an uptick of 0.1%. The REITE, a European REIT index, remained stable, while the Stoxx Europe 600 Retail Index showed a positive inclination of 0.3%.
Analyzing national market indexes, both Germany's DAX and the FTSE 100 in London rose by 0.2%. The CAC 40 in Paris mirrored this increase with a rise of 0.2%, and Spain's IBEX 35 advanced by 0.3%. Yields on benchmark 10-year German bonds were on the rise, nearing 2.43%. Additionally, front-month North Sea Brent crude oil futures experienced an uptick of 0.5%, reaching $75.47 per barrel.
Meanwhile, the Euro Stoxx 50 volatility index decreased by 1.8% to 20.58, which suggests slightly above-average volatility anticipated in the European stock markets over the next 30 days, a potential warning sign. Typically, a reading above 20 indicates a more tumultuous market ahead, while below 20 suggests a calmer trading environment..