Investing.com – European stock markets fell on Wednesday, giving back early gains as investors began to digest the implications of Donald Trump’s return to the White House and the likely impact on regional markets.
At 10:00 ET (15:00 GMT), the price in Germany was trading 1.1% lower, the price in France was down 0.7% and the price in Britain was down 0.3%.
Trump wins the US presidency
According to the Associated Press and other major news networks, Trump will return to the White House as the 47th president of the United States, returning to the White House for a second four-year term.
Republicans are also seen to have gained a majority in the Senate, raising the possibility of a Republican victory in the 2024 elections.
This would give Trump a platform to implement his agenda of tax cuts that could boost American business, even as high tariffs and a potential global trade war under his presidency could negatively impact European companies.
The so-called ‘Trump trade’ is back in full force, according to analysts Barclays (LON:), marked by rising rates, a stronger dollar and higher US stocks, highlighting the relief in the market as investors settle into this familiar landscape.
However, European stocks could see relative downside as a Red Sweep could increase tariff risks for Europe, while a divided Congress could limit domestic fiscal measures while keeping international trade policy at the forefront.
Brussels recognizes that threats of 10% tariffs on all US imports and 60% on those from China are credible and not just campaign rhetoric, EU officials say.
BMW’s third-quarter profit falls
Back in Europe, data released earlier Wednesday showed they held steady last month, a small improvement from September’s modest decline, buoyed by an expansion in the bloc’s dominant services sector.
The composite Purchasing Managers’ Index for the currency union, compiled by S&P Global, rose from 49.6 in October to 50.0 in September.
But most eyes were on higher quarterly figures, now that the season is in full swing.
Shares of BMW (ETR:) fell more than 7% after the German auto giant reported a substantial decline in third-quarter profit, missing expectations due to slumping sales in China and braking problems.
Shares of Marks & Spencer (OTC:) rose 3% after the British retailer reported a better-than-expected 17.2% rise in first-half profit and forecast “further progress” for the full year. work.
Cougar (OTC:) Shares fell nearly 2% after the German sportswear maker reported a 5% increase in currency-adjusted revenue for the third quarter, but this was below expectations as negative currency effects continued to weigh.
Credit Agricole (OTC:) shares fell 5% after the French lender reported a decline in third-quarter net profit due to weakness in some of its retail businesses.
Crude oil prices are falling after the release of the API
Oil prices fell on Wednesday after industry data pointed to a rise in US crude inventories, while the dollar rose on Trump’s election progress.
At 10:00 ET, the contract was down 0.9% at $74.82 per barrel, while futures (WTI) traded 1.2% lower at $71.14 per barrel.
Data released Tuesday showed U.S. crude inventories rose by 3.13 million barrels last week, more than the expected 1.1 million barrels.
These are expected later on Wednesday, but if the API release is confirmed it would raise some concerns that US fuel demand is cooling, especially as the winter season approaches.
A stronger U.S. dollar makes dollar-denominated commodities such as oil more expensive for holders of other currencies, dampening demand.