European Indexes Close Lower After Retail Sales, Business Activities Data

Bridgette Randall
05 Dec, 2022
Frankfurt

Stocks in Europe turned lower on the ongoing economic slowdown and rate path worries after the release of the latest batch of economic data. 

In the region's economic news, the eurozone business activities declined for the fifth month in a row in November and retail sales in October unexpectedly declined from the previous month. 

 

Eurozone Retail Sales Fall

Eurozone retail sales declined 1.8% from the previous month in October and 2.7% from a year ago, extending five months of weakness, Eurostat said Monday.

 

Eurozone Business Activities Fall 

S&P Global confirmed its estimate of a slow down in business activities in November in the eurozone. 

The final composite Purchasing Managers' Index inched higher to 47.8 in November from 47.3 in October, when it was at a 23-month low. 

 

Russia Oil Sanction Kicked In 

Over the weekend, the European Union agreed to impose a price cap on Russian oil shipped using tanker companies based in the region beginning Monday. 

The move is expected to cut into Russia's finances by limiting the price it can charge for the sale of energy, adding an incentive for the resource-rich nation to unwind its military operations in Ukraine. 

Analysts are divided over the effectiveness of the Russian sanctions and Russia has other ways to profit from its sale of energy products in international markets. 

The European Union agreed to cap the price for Russia's seaborne oil to $60 a barrel in an effort to punish President Vladimir Putin for invading Ukraine.

 

OPEC+ Confirmed Production Cut 

OPEC+, a group of 23 oil producing nations, confirmed to cut December production by 2 million barrels a day at its monthly meeting on Sunday.

Despite the resumption of activities in China, investors remained skeptical of the rise in global demand for crude oil.  

Brent crude oil declined $2.55 to $83.01 a barrel and Dutch TTF natural gas eased 0.6% to 134.70 euros MWh. 

In a boost to Germany's efforts in diversifying its energy supply base, Qatar agreed to provide natural gas to Germany on a long term contract basis, but the supplies are not expected to arrive till 2026. 

Qatar signed a 15-year contract to deliver 2 million tons a year of LNG to Germany through ConocoPhillips beginning 2026, supplying 3% of Germany's needs.

 

Bond Yields Slightly Edge Up 

The yield of 10-year German Bunds inched up to 1.89%, French bonds rose to 2.33%, the UK Gilts fell to 3.05% and Italian bonds edged up to 3.75%. 

 

Market Indexes 

Stock indexes across the eurozone traded lower on the worries that the region's economy may be heading for a mild recession, after business activities slumped for the fifth month in a row.  

The DAX index declined 0.6% to 14,447.61, the CAC-40 index fell 0.7% to 6,696.96 and the FTSE 100 index increased 0.1% to 7,567.54.

 

Europe Stock Movers 

Nestle SA declined 1.3% to 111.30 Swiss francs after the consumer products company said it plans to restrict its marketing of food products in high sugar content to children under the age of 16. 

Vodafone Plc increased 0.5% but closed nearly unchanged at 91.13 pence after the telecom group said its chief executive Nick Read will step down after four years in the position.  

Glencore Plc increased 1.4% to 566.18 pence after the company settled a corruption inquiry for $180 million with Democratic Republic of Congo. 

National Grid plc inched up 0.6% to 1,025.98 pence after the UK-based power distribution company completed the sales of its 60% equity stake in gas transmission business to a consortium of investors for