European stocks higher as FTSE struggles amid recession fears

• Here are our trending tickers for today.

  

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  The Bank of England is being warned to consider the latest PMI data ‘carefully’. Photo: Peter Nicholls/Reuters

  Ruth Gregory, deputy chief UK economist at Capital Economics, has said that a recession is already underway, as the Bank of England’s recent interest rate hikes start to slow the economy.

  “Admittedly, the PMI rarely gets the rate of GDP growth exactly right (and the flash estimate is prone to revision),” she said. “But the trajectory supports our view that GDP contracted in both Q3 and Q4 (perhaps by 0.2% q/q) and that a mild recession is perhaps already underway.”

  Rhys Herbert, senior economist at Lloyds Bank, warned that the Bank of England will need to consider the latest PMI data carefully.

  “Some businesses continue to also experience challenges with recruitment, resulting in upward pressure on wages.

  “In addition, there’s increasing concerns about output growth, which the Bank of England will need to consider carefully in its next decision for interest rates.”

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  Oil prices are climbing with investors nervous over Israel-Gaza. Photo: Thomas Peter/ Reuters

  Oil prices rose again on Tuesday as the current situation in Israel and Gaza is fueling concerns of a tight global supply.

  Brent crude (BZ=F) rose 0.11% this morning and was trading at almost $90/barrel. The American benchmark West Texas Intermediate (WTI) was trading at $85 per barrel, up 0.1% from Monday’s close.

• In what is becoming a regular trend, there’s been another decline in business activity according to the latest UK PMI data.

  The flash UK services PMI business activity index fell to 49.2 in October from 49.3 in September, hitting a nine-month low while the flash UK manufacturing PMI rose to 45.2 from 44.3 — a three-month high.

  “The UK economy continued to skirt with recession in October, as the increased cost of living, higher interest rates and falling exports were widely blamed on a third month of falling output,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said.

  “A recession, albeit only mild at present, cannot be ruled out,” he added.

  Services companies reported the smallest increase in input costs since February 2021, although selling prices rose at a slightly faster rate.

• In Asia, Tokyo’s Nikkei 225 (^N225) rose 0.20% to 31,062 points, while the Hang Seng (^HSI) in Hong Kong lost 1.05% to 16,991. The Shanghai Composite (000001.SS) gained ground, rising 0.78% to 2,962 points.

  In Japan, market heavyweight SoftBank Group (9984.T) rose 1.68% and Uniqlo operator Fast Retailing (9983.T) climbed 1.74%.

• Wall Street stocks delivered a mixed performance overnight as traders paid close attention to US Treasury yields and awaited key earnings and economic data later in the week.

  The Dow Jones (^DJI) lost 0.58% to close at 32,936 points. The S&P 500 (^GSPC) fell 0.17% to finish at 4,217 points and the tech-heavy NASDAQ (^IXIC) rose 0.27% to 13,018.

  S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the green as trade began in Europe.

• Barclays profit drops

  Barclays (BARC.L)said its pre-tax profits fell 4% between July and September compared with a year earlier, to £1.9bn, with the lender setting aside more than £430m to cover expected loan losses.

  Higher interest rates and weaker house prices prompted the bank to increase its credit impairment charges, despite the proportion of people falling behind on loan repayments remaining low, it said.

  Barclays revealed that income from its corporate and investment banking division fell by 6% year on year as volatility in the financial markets led to lower customer activity.

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