FRANKFURT: European shares were subdued on Wednesday after several disappointing earnings reports, coupled with higher oil prices, exacerbated investor unease ahead of a rate decision from the central bank.
The pan-European STOXX 600 index rose 0.07 percent to 644.14 points. The media and mining indexes, were among the biggest laggards.
The muted moves will set the tone ahead of the European Central Bank’s policy decision on Thursday. Investors widely expect a rate hold but will still look for clues on the trajectory going forward.
With the yields on French sovereign bonds high, markets will also be watching for signs of a dovish tone from the ECB in response to the country’s turmoil.
“We don’t think we are there yet. But equally, we admit that a more dovish tone on further tightening would probably be the first line of defence against more bond volatility,” ING economists wrote.
Thyssenkrupp was the biggest loser on the STOXX 600 following a 17 percent decline, after a muted market debut for its materials trading division.
Dutch payments platform Adyen was the second biggest loser, down over 13 percent after it lowered its core earnings margin target for 2026.
The UK’s FTSE 100 index ended a touch higher after the British finance minister John Healey unveiled his first budget.
Among financial stocks, Deutsche Bank gained about 4 percent after reporting a surprise jump in third-quarter profit. Standard Chartered rose 2.4 percent after hiking its full-year growth and profitability targets.
On the other hand, Spain’s Santander fell 5.6 percent after third-quarter results as weaker earnings in Brazil weighed, leading the bank-heavy Spanish benchmark down 1.5 percent, the most among peers.
UBS dipped 0.6 percent after posting a third-quarter net profit roughly in line with expectations.
However, analysts remained constructive on the sector.
“We still expect the banks to remain in a good place in terms of their business strength because we have not seen the economies weaken as much as we would have expected them to weaken,” said Ipek Ozkardeskaya, senior analyst at Swissquote.
Oil prices rose 1.7 percent, dampening risk appetite, while a drop in copper prices pulled miners lower. Media stocks also fell, dragged down by a 4 percent decline in Universal Music Group.
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