European Markets Tumble as Auto Sector Faces Earnings Blow

European stock indices dropped, led by the automotive sector's poor earnings reports from Valeo and Mercedes-Benz. The STOXX 600 saw a decline, with auto stocks plummeting 0.9%. Meanwhile, strong results from NatWest provided some relief to bank stocks, and Remy Contreau faced setbacks on sales forecasts.

In a turbulent trading session, European stock indices faced a downturn on Friday, driven predominantly by poor earnings reports in the automotive sector. Notably, major players like Valeo and Mercedes-Benz registered significant declines, pulling the pan-European STOXX 600 down by 0.3%.

The automotive sector suffered a 0.9% drop, with German automaker Mercedes-Benz experiencing a 3.7% fall. This came on the heels of the company’s third-quarter earnings in its core car division, which missed estimates significantly. Similarly, Valeo saw its stock plummet by 7.5% as it slashed its annual sales guidance for the second time this year.

Meanwhile, positive earnings from NatWest bolstered bank stocks, which climbed 0.4%. However, French spirits-maker Remy Contreau faced challenges, shedding 3% at open after revising its sales recovery forecast. As investors wrestle with corporate performances and broader economic indicators, the market remains cautious ahead of the U.S. elections.

(With inputs from agencies.)