European stocks drop 1.1% as strong growth dims ECB rate cut bets

European stocks continued their downward trend on Wednesday, with the STOXX 50 and the STOXX 600 declining by approximately 1.1% as traders analyzed recent corporate earnings reports.

European stocks drop 1.1% as strong growth dims ECB rate cut bets

Additionally, unexpectedly strong growth figures diminished expectations for a more significant 50 basis point rate cut by the European Central Bank (ECB) in December. The Eurozone economy grew by 0.4% quarter-on-quarter in Q3, doubling the growth rate of Q2 and surpassing market predictions of 0.2%. In the corporate sector, luxury stocks faced pressure, with Moncler reporting a revenue decline and falling 2.5%. Significant players like LVMH, Kering, and L'Oreal also saw losses, dropping by 2.3%, 3.9%, and 2.2%, respectively. Meanwhile, UBS erased early gains, dropping 1.8% despite reporting better-than-expected profits. GSK fell 3.5% after its sales for two blockbuster vaccines came in below expectations.

Capgemini and Campari shares dive; Volkswagen sees modest gain

Capgemini plummeted nearly 7% after lowering its full-year revenue forecast, and Davide Campari Milano sank almost 15% after its results fell short of projections. In contrast, Volkswagen rose 0.9%, supported by revenue that slightly exceeded expectations despite a 42% drop in operating profit.