European Markets Extend 2023 Rally After Natural Gas Price Plunge 15%

Bridgette Randall
16 Jan, 2023
Frankfurt

European markets advanced and extended 9-month highs after positive sentiment prevailed. 

European market indexes traded higher after the reopening of China raised hopes of easing pressures on global supply chain and easing of inflation in the U.S. also raised the hopes of smaller rate hikes. 

The positive sentiment was also supported by the continued easing of natural gas prices on the rising supply in the region after China's full-storage shifted cargo deliveries to the region.  

 

Germany's Wholesale Prices Eased In December 

Germany's wholesale inflation index eased to 12.8in December from 14.9% in November, Destatis or the Federal Statistics Office said in a report Monday. 

From the previous month, wholesale prices eased 1.6% in December.  

In 2022, wholesale prices rose 18.8% after energy prices soared 50.1%. 

 

European Markets Extend 9-month Highs 

European markets opened higher on mild optimism on China reopening optimism and expectations of falling inflation in the region. 

The DAX index  increased 0.3% to 15,124.45, the CAC-40 index advanced 0.4% to 7,049.94 and the FTSE 100 index rose 0.2% to 7,860.46. 

The euro inched higher to $1.082, the British pound increased to $1.2205 and the Swiss franc held steady at 92.62 U.S. cents. 

 

Natural Gas Prices Plunge Amid Warmer Climate and Elevated Storage

Natural gas prices continue to drop after more cargo ships are expected to arrive in the region as China storage remains full. 

Natural gas prices peaked on August 26 just under €340 per MWh amid warmer weather conditions and near full-storage at locations in the region. 

Natural gas prices dropped 15% and extended this year's loss to 40% €54.15 per MWh. 

Brent crude oil eased 92 cents to €82.36 a barrel. 

 

Europe Stock Movers 

Fraport AG increased 1.1% to €47.74 after the operator of Frankfurt airport reported a strong rebound in December and 2022 traffic. 

In December, Frankfurt airport processed 4 million passengers, an increase of 46.2% from a year ago. 

For 2022, the total number of passengers processed soared 97.2% to 48.9 million. 

Cargo throughput, in contrast, fell 19% to about 159,671 metric tons in December 2022, reflecting the overall economic slowdown and the impact of airspace restrictions related to the Ukraine war.

All airports managed by Fraport reported a sharp jump in 2022 traffic. 

Passenger arrivals at 14 Greek regional airports soared 79% to 31.2 million, Antalya Airport Turkish Riviera soared 41.8% to 31.1 million and two Brazilian airports at Fortaleza and Porto Alegre recorded passenger gains of 41% to 12.4 million combined. 

The Bulgarian coastal airports of Burgas and Varna saw combined traffic in 2022 advanced 59.2% to 3.1 million passengers.

Temenos AG increased 8.9% to Sfr 62.0 after chief executive Max Chuard resigned under pressure from activist investors. 

Sika AG increased 3.5% to Sfr 255.10 after the specialty chemical company signed a deal to sell select concrete additives business to the UK-based INEOS and meet regulatory requirements and complete the purchase of MBCC. 

Ashmore Group Plc was nearly unchanged at 271.40 pence and the UK-based asset management group reported a 2% rise in assets under management. 

Assets under management increased 2% to $57.2 billion at the end of December 2022 from $56.0 billion at the end of September 2022. 

Fixed income under management increased 3% to $49.9 billion, equity funds assets rose 2% to $6.0 billion and alternative assets under management rose 2% to $1.3 billion. 

Centamin Plc declined 3.5% to 119.35 pence after the gold mining company said that the Egyptian Supreme Court has reversed the lower court ruling challenging the Sukari gold mining concession between the government and the subsidiary of the company.