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Europe ends relatively mixed as geopolitical jitters linger; Autos, oil prices rise

  • The pan-European Stoxx 600 came off its lows to finish just above the flatline, ending up 0.06 percent. Sectors and major bourses pointed in different directions by the close.
  • Top performers in trade included Micro Focus and Orion, while property stocks Berkeley Group and Barratt Development were found at the bottom of the STOXX 600, as Brexit uncertainty lingers.
  • A rebound in U.S. markets and a rise in both oil prices and autos stocks also lifted sentiment.

European markets ended Wednesday on a relatively mixed note, as investors cheered on the rebound seen in U.S. markets; yet geopolitical concerns continued to rumble on in the background.

The pan-European Stoxx 600 came off its lows to finish just above the flatline, ending up 0.06 percent. Sectors pointed in different directions by the close.

Looking at individual bourses, the FTSE 100 fell behind other indexes, closing down 0.25 percent. Meanwhile, the French CAC popped 0.29 percent and the German DAX rose 0.75 percent.

Symbol
Name
Price
 
Change
%Change
Volume
FTSE
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DAX
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CAC
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IBEX 35
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When it comes to European sectors, autos posted the best gains, closing up 1.69 percent overall, following two key stock rating upgrades. Barclays raised its rating for Fiat Chrysler to "overweight" from "equal weight", while Goldman Sachs upgraded its rating for Daimler to "buy" from "neutral". Both firms closed up above 3 percent.

Finland's Orion was one of the best performers, finishing up 5.72 percent after Nordea Equity Research raised it to a "buy" rating, and lifted its target price on the stock.

In the meantime, Micro Focus ended on a high, closing up 6.16 percent after a well-received third quarter update. Fellow tech stock Software AG also rose 4.8 percent, after Kepler Cheuvreux raised its target price on the stock.

On the opposite end of the spectrum, British property firm Barratt Developments, reported stronger-than-expected fiscal 2017 earnings on Wednesday. The firm said it would return £175 million ($226 million) to shareholders in the form of a special dividend. Its shares however ended down 4.56 percent as the group continued to warn of Brexit uncertainty.

Fellow housebuilder Berkeley Group also sank during trade, ending 2.5 percent lower after the U.K. firm echoed a similar sentiment to Barratt, stating that the London property market is still being hit by uncertainty surrounding a property tax hike and Article 50 negotiations; Reuters reported.

US markets bounce back

Europe markets emerged out of the red in later trade after markets in the U.S. posted solid gains in its morning trade— a positive reversal from the sharp drops seen in the previous session.

On Tuesday, the Dow Jones industrial average recorded its biggest one-day drop since mid-August, as jitters surrounding North Korea's latest nuclear test amplified. However, on Wednesday, sentiment in the States appeared to be somewhat lifted by a rise in big tech and financial stocks.

In addition to individual stock moves, Wall Street was also digesting the news that two Congressional leaders, Chuck Schumer and Nancy Pelosi, had announced that they were prepared to vote in favor of a three-month debt limit increase. Recently, investors have been concerned over the likelihood of a government shutdown if the debt limit wasn't raised.

In politics, Stanley Fischer, the vice chairman of the Federal Reserve, announced Thursday that he was stepping down from his position at the U.S. central bank. Reaction in markets both in Europe and overseas appeared muted.

'More gift packages'

Tensions in the Korean Peninsula showed little sign of abating following Pyongyang's largest-ever nuclear test on Sunday. Despite international condemnation in the wake of the isolated regime's latest test, a top North Korean diplomat threatened the U.S. with "more gift packages" on Tuesday.

Even with the uncertainty surrounding North Korea, safe-haven assets such as the Japanese yen and gold weren't as popular as investors worldwide tried to shake off geopolitical jitters.

Uncertainty continues to play a role in commodity markets as well, with oil prices having been on edge as of late due to concerns over Hurricane Harvey and Hurricane Irma. Despite the volatility, prices ticked higherWednesday, as some U.S. Gulf Coast refineries started to reopen.

Finally, investors continue to look ahead to Thursday's meeting of the European Central Bank's Governing Council, which is expected to debate the timing of an exit from its ultra-loose monetary policy program.

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—CNBC's Fred Imbert contributed to this report.