European stocks dragged lower by HSBC, Ferrari

The pan-European STOXX 600 closed 0.4% lower, coming off its record high hit in the previous session

European stocks dropped on Thursday, dragged lower by steep losses in HSBC and Ferrari, knocking the STOXX off its record perch as investors kept a wary eye on France’s deepening political turmoil.

The pan-European STOXX 600 closed 0.4% lower, coming off its record high hit in the previous session.

Ferrari shares slipped to their worst single-day drop on record, ending at their lowest since April, as underwhelming long-term financial targets dulled investor enthusiasm and stole the spotlight from the luxury Italian carmaker’s electric debut.

Auto stocks logged their worst daily performance since March, with Michelin also adding to the blow. The French tire maker was off 3.8% after saying its third-quarter sales volumes would drop compared to the previous year.

Shares of HSBC slid 5.4%, the biggest drag on the STOXX, after the British lender said it plans to buy out minority shareholders in its Hang Seng Bank subsidiary in a deal worth nearly $13.6 billion.

There are obviously concerns about the timing and the variation of the deal, said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.

Lloyds Banking Group slumped 3.3% after the lender said it would likely need to set aside more cash to cover the cost of compensating motor finance customers in a probe.

Investors kept a close watch on France as President Emmanuel Macron sought his sixth prime minister in less than two years, hoping the next pick could navigate a budget through a crisis-hit legislature.

French assets were rattled earlier this week after Sebastien Lecornu tendered his and his government’s resignation just hours after announcing the cabinet line-up.

The regional blue-chip index gave up early gains to close 0.2% lower. Still, the benchmark remains one of the laggards in 2025, up nearly 9.2% compared to double-digit percent gains in some other countries.