European Stocks Decline Due to Disappointments from Novartis and BP  

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(Bloomberg) — European stocks declined on Tuesday following unsatisfactory earnings reports from major companies BP Plc and Novartis AG, as traders evaluated increasing market risks in what is becoming an important week for equities. The Stoxx Europe Stoxx Index reversed its earlier gains to close 0.6% down, with travel and leisure stocks, autos, and the energy sector being the hardest hit. Novartis caused some of the most significant fluctuations, serving as the main detractor from the benchmark after reporting disappointing sales growth for several of its essential medications. BP also faced pressure as the oil company reported an increase in net debt. In contrast, banks performed well, benefiting from a rise in HSBC Holdings Plc’s shares after the bank announced a $3 billion stock buyback and exceeded profit expectations. Santander Bank Polska SA also saw gains, reflecting its robust earnings performance in the third quarter. European stocks have remained within a narrow range for most of the past month due to various risks facing investors. In the UK, attention is focused on the budget set for Wednesday, which is anticipated to include tax hikes and spending reductions. Traders are also keeping an eye on eurozone inflation figures that will be released later this week. Additionally, with only a week left, the US presidential election is still too uncertain to predict. “The US election is expected to be the main driver for the next change in European stocks,” stated Hani Redha, a portfolio manager for global multi-asset at PineBridge Investments. “Considering the current standstill in the eurozone’s economy, this factor is expected to be crucial.” For additional information on equity markets: Do you want additional updates on this market? Click here for a specially selected First Word channel featuring practical news from Bloomberg and other chosen sources.

 

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