China Growth Worries Kept European Indexes In Check

Bridgette Randall
17 Jan, 2023
Frankfurt

European markets edged lower but hovered near 11-month highs after oil, gas and mining stocks advanced following the hopes of demand recovery in advanced economies and in China. 

Stocks in Paris struggled after luxury stocks fell on the worries of China's economic growth. 

 

China Reported Second Weakest Annual GDP Growth In Five Decades

China reported its worst economic growth in nearly five decades in 2022 after zero-Covid policy dampened economic activities despite record trade surplus in the year. 

China's GDP growth in the fourth quarter 2022 slowed to 2.9% from 3.9% in the third quarter. 

On a quarterly basis, the economy was flat after expanding at 3.9% in the previous three months to September. 

For the full-year 2022, the economy expanded at 3%, the slowest pace since 1976 excluding 2.2% advance in 2020 during the onset of the coronavirus pandemic. 

Retail sales declined 1.8% from a year ago in December and fell 0.2% in full-year 2022. 

Industrial production increased 3.6% in full-year 2022 and advanced 1.3%. 

 

European Indexes Hovered Near 11-month Highs 

The DAX index fell 9.4 points to 15,124.66, the CAC-40 index was nearly unchanged at 7,043.77 and the FTSE 100 index fell 0.1% to 7,850.83. 

The euro traded higher at $1.085, the British pound edged higher to $1.227 and the Swiss franc inched lower to 91.96 U.S. cents. 

 

Energy Prices Trade Higher In Europe 

Energy prices rose in Europe following the optimistic report from OPEC. 

"Preliminary figures show crude imports into OECD Europe remaining at healthy levels through the end of the year, despite imports of Russian crude falling to near zero excluding flows to Turkey. 

OECD Europe product imports are also seen to be higher in anticipation of the impending February sanctions on Russian oil product imports," the report from the OPEC highlighted. 

Brent crude oil rose $1.94 to $86.32 a barrel and the Dutch TTF natural gas futures price rose 5% to €58.63 per MWh. 

The yield on 10-year German Bunds traded lower to 2.16%, French bonds declined to 2.63%, UK Gilts to 3.40% and Italian bonds inched higher to 4.002%. 

 

Whirlpool Sells Europe Business 

Whirlpool Corporation increased 2.2% to $157.70 after the household equipment maker said it plans to sell its Europe, Middle East and Africa business and form a partnership with Turkey-based Arcelik AS. 

Whirlpool will contribute its European domestic appliance business, and Arcelik will contribute its domestic appliance, consumer electronics, air conditioning, and small domestic appliance businesses into the newly formed entity. 

Whirlpool will own 25% and Arcelik 75% of the newly formed company and Arcelik will retain full-ownership of its Turkish business. 

 

Europe Stock Movers 

Nordex SE closed nearly unchanged at €14.76 after the Germany-based wind turbines maker reported a fall in orders in the fourth quarter and in 2022.  

In the fourth quarter, the company received orders for 386 wind turbine compared to 678 with a total output of 1.9 GW compared to 3.3 GW a year ago. 

The average sales price in euros per megawatt of capacity soared to €0.89 million/MW  compared to €0.74 million/MW a year ago. 

Hugo Boss AG declined 2% to €59.44 after the luxury fashion designer said preliminary sales in the fourth quarter rose 18% to €1.07 billion from €905 million a year ago. 

Hays Plc increased 2.2% to 121.76 pence after the recruiting company reported an increase in its fiscal second quarter fees. 

Net fees in the December quarter increased 11% or rose 8% on a comparable basis, driven by a 25% jump in revenue in Germany. 

The recruitment agency reiterated its operating earnings estimate for the first-half between £95 million and £97 million. 

THG plc plunged 8.7% to 62.50 pence after the online retailer of cosmetics and dietary supplements reported weaker-than-expected full-year sales.

2022 revenue increased 4.1% to £2.25 billion after combined revenue in its beauty and nutrition divisions rose 9.4% from a year ago. 

"A dedicated focus on high-margin categories and relatively low maintenance capital expenditure supports the Group's expectation of being broadly free cash flow neutral in FY 2023, and significantly free cash flow positive in FY 2024," the company said in its trading statement. 

Ocado Group Plc declined 9.2% to 733.0 pence after the online retail platform in partnership with Marks & Spencer estimated sales growth "in mid-single-digits" in 2023.