European stock markets fell sharply at Tuesday’s open, reversing the positive sentiment from the start of the month as investor focus shifted squarely to a heavy slate of corporate earnings reports.
The pan-European Stoxx 600 index dropped more than 1.1% shortly after the opening bell.
The sell-off was broad-based, with Germany’s DAX falling 1.5%, France’s CAC 40 down 1.4%, and the UK’s FTSE 100 opening almost 0.7% lower.
A wave of corporate earnings awaits
The cautious mood is being driven by anticipation for third-quarter results from a number of European heavyweights, including BP, Philips, Associated British Foods, and Ferrari, all scheduled to report on Tuesday.
Early in the session, Saudi Aramco provided an initial data point, posting a 0.9% jump in its third-quarter profit, supported by higher production even as oil prices remained under pressure.
The results from oil major BP are under particular scrutiny from investors.
The company’s stock had advanced around 1.2% on Monday after it announced a significant deal to sell certain US onshore midstream assets in the Permian and Eagle Ford basins to Sixth Street for $1.5 billion.
Tuesday’s earnings will provide a clearer picture of the energy giant’s underlying performance.
Global cues offer mixed signals
The negative start in Europe came despite a positive session for the US tech sector on Monday, where continued enthusiasm for artificial intelligence lifted the S&P 500 and Nasdaq Composite.
That rally was driven by major AI players, including a 4% jump in Amazon shares after it announced a $38 billion deal with OpenAI.
Overnight, however, the mood was more subdued. Asia-Pacific markets traded mixed, and US stock futures were pointing to a slightly lower open.
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