European shares down as mining stocks drop

The pan-European Stoxx 600 index dropped 0.3%, with bourses in major markets Germany, France and Italy also finishing lower

European shares closed Wednesday’s choppy session in the red, with mining stocks among top drags, while weak earnings from heavyweights such as Germany’s Deutsche Bank and L’Oreal pressured sentiment further.

The pan-European Stoxx 600 index dropped 0.3%, with bourses in major markets Germany, France and Italy also finishing lower.

Basic resources was the worst-hit sector, retreating 1.4%, with Sweden’s Boliden declining 2.3% following a UBS rating downgrade to “sell” from “neutral”.

Earnings took centre stage with Deutsche Bank shares pulling back 2% after the lender raised its forecast for bad loans against the backdrop of a weak German economy, which overshadowed its return to profit in the third quarter.

The stock was among top losers on the DAX and the European bank index slipped 0.5%.

While the stubbornly high provisions are a clear negative, we consider that some confidence was given by the guidance pointing to lower provisions for the fourth quarter and also for 2025, according to Suvi Platerink Kosonen, senior sector strategist, financials at ING Bank.

L’Oreal stock slid 2.5% to the bottom of the CAC 40 after missing third-quarter sales estimates due to reduced beauty products demand in China and slower growth for its dermatological division.

On the flip side, automobiles led sectoral gains with Stellantis up 3%. Volvo Cars tumbled 5.9% to the bottom of the Stoxx index after cutting its full-year sales growth forecast.

ECB chief economist Philip Lane said the recent flow of relatively weak data on the euro zone economy has raised questions about the bloc’s recovery prospects.

Worries are that sluggish economic growth in the currency union could reflect in corporate performance this quarter. The Stoxx 600 index has made negligible progress from levels first hit in mid-May this year.