Europe Indexes Extended YTD Gains, Euro Area Sentiment Improved

Bridgette Randall
23 Jan, 2023
Frankfurt

European markets closed higher and tech stocks led the gainers after positive sentiment supported broad market advance. 

Benchmark indexes in the region advanced on the hopes of China's reopening, falling natural gas prices and slower rate hikes in the U.S. but the European policymakers supported aggressive rate hikes at the next meetings in February and March. 

The Euro Area consumer sentiment index in January 2023 improved to the high not seen since February 2022 on the hopes of lower energy prices and the region may avoid a recession this year.

The sentiment index increased by 1.1 points to -20.9 in January, the European Commission said in a release Monday. 

 

Broad Rally Power European Market Advance  

The DAX index increased 0.5% to 15,102.95, the CAC-40 index rose 0.5% to 7,032.02 and the FTSE 100 index closed up 0.2% to 7,784.67. 

The euro rose to a new 9-month high of $1.09 on the expectations of 50 basis points rate increases at least at the next meetings in February and March.

The euro inched higher to a new 9-month high of $1.09, the British pound edged lower to $1.233 and the Swiss franc closed down to 92.39 U.S. cents. 

The yield on 10-year German Bunds advanced to 2.20%, French bonds traded higher to 2.65%, the UK Gilts to 3.35% and the Italian bonds to 4.01%. 

Brent crude oil increased 49 cents to $88.12 a barrel and the Dutch TTF natural gas futures contract price fell 90 cents to €66.0 per MWh. 

 

Europe Stock Movers 

CNH Industrial NV gained 0.6% to €15.79 and the agriculture equipment maker was in focus after union workers ratified a new contract for two manufacturing locations in Iowa. 

Balfour Beatty Plc increased 1.06% to 363.80 pence after the construction company won a 1.2 billion contract from National Highways to build  'Roads North of the Thames' network for the proposed Lower Thames Crossing.

Saga Plc increased 2.5% to 154.21 pence after the over-50 travel services provider said it is seeking a buyer for its in-house insurance underwriting operation.  

Nokia Oyj increased 1.6% to €4.29 after the Finnish telecom company signed a cross-license patent agreement with Samsung Electronics. 

National Express Group Plc increased 4.2% to 143.28 pence after the company said its German unit National Express Rail GmbH secured a one billion euros contract for rail operations in Germany.  

Dignity Plc soared 8.5% to 545.0 pence after the company agreed to be acquired by a consortium of investment companies including Phoenix Asset Management Partners, Castelnau Group and SPWOne V Limited. 

The company's board accepted a cash offer of 550 pence a share valuing the funeral homes operator at  approximately £281 million on a fully diluted basis and an implied enterprise value of approximately £789 million. 

The cash offer represents 29.3% premium to the closing price of 425.5 pence of Dignity Share on January 3.