European Stocks Halt 5-day Slide, France GDP Growth Slows

Bridgette Randall
09 Dec, 2022
Frankfurt

European markets halted weeklong slide after industrial and financial stocks led gainers and energy prices eased.

Investors shifted focus to upcoming policy meetings next week and markets are awaiting slower rate hikes in the U.S. and eurozone.

The U.S. Federal Reserve is set to announce its interest rate decision on Wednesday and markets are factoring at least 50 basis points increase after four 75 basis points increase in a row.

The European Central Bank is also scheduled to lift its deposit rate on Thursday and markets are anticipating a 50 basis points increase to 2.0%, matching the rate in 2009.

The Bank of England is expected to revise its key lending rate higher by 50 basis points to 3.5% on Wednesday following a 75-basis-point increase in November, the largest in three decades.

 

Stock Market Halts Five-day Slide

Stocks rebounded on the final day of the week and halted five-day long slide ahead of rate decision next week.

Market indexes closed higher following a week of selloff on the worries of global economic slowdown and elevated inflation and ongoing Covid-curbs in China.

The DAX index increased 0.7% to 14,370.72, the CAC-40 index advanced 0.5% to 6,677.64 and the FTSE 100 index gained 4.46 points to 7,476.63.

For the week, the DAX index, the CAC-40 index and the FTSE 100 index and the Swiss Market index closed down 1%  

 

Oil Extends Weekly Loss to 10%.

Crude oil prices dropped about 10% in the week despite the supply worries.

OPEC+ confirmed its production cut of 2 millions barrels a day after last Sunday's meeting and the European Union placed its price cap of $60 a barrel on Russia oil transported using tankers registered in the region.

Despite the supply worries, oil prices dropped to this year's low on the global slowdown and slow rebound of activities in China.

Moreover, China's exports to the European Union dropped 10.6% in November, confirming demand slowdown in the region.

Brent crude oil increased 42 cents to $76.57 a barrel and Dutch TTF natural gas prices rose 0.1% to 139.11 euros per MWh.

 

Bond Yields Rebound to 2-month Highs

Government bond yields rebounded in Friday's trading and closed at 2-month highs in anticipation of rate increases next week.

The yield on 10-year German Bunds increased to 1.94%, French bonds inched up to 2.39%, the UK Gilts to 3.18% and Italian bonds advanced to 3.81%.

 

France Fourth Quarter GDP Growth Slows

The French economy is expected to slow down further in the fourth quarter according to a monthly survey from the Bank of France.

The eurozone's second largest economy in the fourth quarter GDP is expected to expand 0.1% from the previous quarter following a 0.2% increase in the third quarter.

The estimate was prepared after surveying 8,500 French businesses between November 28 and December 5.

The European Commission estimated French GDP to slow down to 0.4% in 2023 from 2.6% increase in 2022.

 

Spain's Industrial Production Growth Slows

Spain's industrial production growth slowed for the fourth month in a row in October, the statistical office INE reported Friday.

Industrial production after adjusting for seasonal factors increased at a slower pace of 2.5%, slower than 3.6% rise in October.

Industrial production started to advance in April but the growth has been decelerating for the last four months.

On a monthly basis, industrial production declined 0.4% in October after falling 0.1% in September.

 

Europe Stock Movers  

Energy producers traded down between 1% and 3% on the worries that economic activities are likely to fall at a faster pace in the coming months.

Shell Plc fell 1.7%. TotalEnergies SE declined 1.5% and BP Plc eased 0.7%  

Anglo American declined 3.4% to 3,199.32 pence after the copper and iron ore mining group said unit production costs are estimated to increase 16% and volume fall 3% in 2022 from a year ago.

Credit Suisse closed up 6.4% to 3.14 Swiss francs after the struggling Swiss bank said it raised 2.2 billion Swiss francs of the targeted 4 billion Swiss franc fundraising plan.

Carl Zeiss Meditec declined 3.5% to