Europe open: Markets edge higher, but banks drag FTSE 100 into red

(Sharecast News) - European stocks mostly rose on Tuesday morning, but big falls in London's banking sector meant the FTSE 100 was alone in the red early on.

The pan-European Stoxx 600 Index was up just 0.1% in early deals, attempting to bounce back after five straight days of losses. The Dax, Cac 40 and Ibex 35 were all up 0.2%, while the FTSE MIB was down 0.1% and the FTSE 100 dropped 0.3%.

In London, shares in Barclays tanked 8% after the bank's third-quarter results. Headline profits were ahead of analysts' forecasts, but the bank cut its guidance for retail banking net interest margin (NIM) for 2023.

The full-year Barclays UK NIM - the difference between interest income and the amount it pays back in interest on deposits - was revised to 3.05-3.10%, down from earlier guidance of 3.15-3.20%.

Sector peers Lloyds, Natwest and HSBC were all trading lower.

Economic data

It was a busy day for economic data on the continent, while a speech from European Central Bank president Christine Lagarde would likely be closed watched around lunchtime, as it comes ahead of the ECB's policy meeting on Thursday.

In the UK, the unemployment rate improved to 4.2% from 4.3% in the three months to August, surprising economists who didn't expect any change.

Forward-looking German consumer confidence weakened in November, with the GfK index dropping to -28.1 from a revised -26.7 the previous month.

The HCOB German manufacturing PMI improved from to 40.7 in October from 39.6 in September, but still remains well below the key 50-point level which separates contraction from growth. The services PMI meanwhile, fell to 48 from 50.3.

Meanwhile, the PMIs for the whole Eurozone will be due out in the coming hours.

"It's already reasonable to suggest that the ECB won't move on rate this week, with the October flash PMIs merely serving to underscore how weak the European economy remains, and with the recent sharp rise in energy prices this weakness is likely to endure," said analyst Michael Hewson from CMC Markets.