Europe midday: Stocks slump as oil rises; Hermes slides on results

(Sharecast News) - European stocks were still sharply lower by midday on Thursday amid higher oil prices, having taken their opening cue from a weak Asian session, as investors sifted through a raft of corporate news and as French bond yields hit a fresh 24-year high. The benchmark Stoxx 600 index and Germany's DAX were both down 0.9%, while France's CAC 40 suffered heavier losses, trading 1.3% lower.

At the same time, Brent crude was up 2.7% at $111.79 a barrel and West Texas Intermediate was 2.2% firmer at $99.26 amid reports the US is planning to resume strikes against Iran and following a Houthi drone strike on Saudi Aramco's Shaybah oil field, which prompted the US State Department to order the departure of non-emergency personnel from Saudi Arabia.

According to The New York Times, the US and Israeli militaries have drawn up specific plans for renewed strikes on Iran after next month's midterm elections. Citing US officials and other people briefed on the deliberations, the NYT said planning for a "short but intensive" operation is progressing.

Meanwhile, the yield on France's 10-year bond was up nine basis points at 5.0929%, after breaching 5% on Wednesday for the first time since July 2002.

Susannah Streeter, chief investment strategist at Wealth Club, said: "Asian markets tanked as semi-conductor stocks sold off as investors turned wary again about the rising costs of borrowing, fuelled by stubbornly high energy prices. The Nikkei closed down 2.2% while South Korea's Kospi plunged by more than 3%, as the big chip players SK Hynix and Samsung, which account for around 50% of the index due to their huge valuations took a hammering. The cost of getting into the AI race is already eye-watering, and trying to keep abreast of the competition is a high-stakes game.

"Brent crude has crept higher as tensions in the Middle East ratcheted up again. Houthi forces have again attacked Saudi energy infrastructure, with strikes on Aramco's Shaybah oil field. With the US administration ordering personnel to leave embassies, it doesn't instil much confidence in ongoing efforts to find a resolution."

In equity markets, tech stocks were under pressure after the selloff in Asia, with ASML and Infineon both down 3%.

Barclays was little changed as it reported a slightly lower-than-expected third-quarter profit following a strong performance in equities but weakness in fixed income, announced a £500m share buyback and confirmed plans to cut around 5,000 jobs this year in an AI push.

Hermes tumbled nearly 8% after the luxury fashion brand reported a slowdown in third-quarter sales.

Roche nudged lower even as the Swiss pharmaceuticals group's third-quarter sales exceeded forecasts.

Nestle gained as the food and drinks giant's third-quarter organic sales growth beat expectations.