By Emily Horton
European indexes were in the red on Thursday, as French bank Société Générale SA announced it expected its fourth-quarter capital markets revenues to fall by around 20%.
In the U.K., Prime Minister Theresa May has survived a no-confidence vote, freeing her to start cross-party discussions on finding a way forward on Brexit.
What are markets doing?
All major European indexes were down on Thursday, with the Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP -0.28% dropping by 0.3% to 349.53, after ending up 0.5% on Wednesday.
Germany’s DAX /zigman2/quotes/210223310/composite DAX -1.11% lost 0.5% to 10,877.02, Italy’s FTSE MIB /zigman2/quotes/210598024/delayed IT:I945 -0.16% dropped by 0.1% to 19,450.11 and France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -0.65% was down by 0.6% to 4,780.14. The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.02% lost 0.7% to 6,814.35.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.1876% rose slightly to $1.1397 from $1.1393 late Wednesday in New York, while the British pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.2277% rose to $1.2913 from $1.2878.
What is driving the market?
Banks were driving down stocks after Société Générale SA warned that its fourth quarter was affected by a challenging environment in global capital markets. The French bank expects revenue in this business to fall by around 20% in the fourth quarter and by 10% for 2018.
In the U.K., May is hoping to find a parliamentary consensus on Brexit that she can take back to Brussels for renegotiation, after her previous withdrawal agreement was roundly dismissed by politicians earlier in the week.
But the PM is likely to stick to the core outline of her failed deal, a strategy that Michael Hewson, chief market analyst at CMC Markets U.K., compared to “trying to resurrect a corpse”.
In the U.S., House Speaker Nancy Pelosi has urged President Donald Trump to delay his State of the Union address. Pelosi said that because of the current government shutdown, unfunded security agencies are ill-equipped to protect the government during the speech, The Wall Street Journal reports .
Which stocks were active?
French bank Société Générale /zigman2/quotes/206663756/delayed FR:GLE -0.92% lost 5% after its poor revenue predictions. BNP Paribas SA /zigman2/quotes/206351084/delayed FR:BNP -0.89% fell close to 4% and Deutsche Bank AG /zigman2/quotes/205584254/delayed DE:DBK +0.68% /zigman2/quotes/203042512/composite DB +0.09% fell over 3%.
Austrian listed Voestalpine AG was down by nearly 6%, after the company cut its guidance for the 2019 financial year.
Auto stocks were also under pressure, with Germany’s Volkswagen AG /zigman2/quotes/206736865/delayed DE:VOW 0.00% down by nearly 2%.
Software company Sage Group PLC /zigman2/quotes/204528931/delayed UK:SGE -0.20% led the European gainers, jumping 6%, as strong revenues pushed its stock up. Experian PLC /zigman2/quotes/210252954/delayed UK:EXPN -0.07% added 1% on the news its revenues were up 9%, while Associated British Foods PLC /zigman2/quotes/204493701/delayed UK:ABF -0.67% gained 5%.