European Indexes Closed at One-year Highs, French Jobless Rate Dropped to 14-year Low

Bridgette Randall
14 Feb, 2023
Frankfurt

European markets advanced in lackluster trading and investors reacted to domestic earnings in the backdrop of rate worries. 

Benchmark indexes in Germany and France traded at one-year highs and the UK index extended gains over the year. 

The Euro Area GDP growth was reaffirmed for the fourth quarter and France's jobless rate dropped to the level not seen in more than a decade. 

Germany's wholesale inflation declined to 10.6% in December, a 21-month low after rising at 12.8% in November, the Federal Statistics Office said Tuesday.

 

Euro Area GDP Growth Reaffirmed 

The Euro Area GDP increased 0.1% in the fourth quarter, confirming its previous estimate released by the statistical office Eurostat Tuesday. 

However, the pace of economic growth slowed from 0.9% in the second quarter and 0.2% in the third quarter. 

The statistical office left its annual growth unrevised at 1.9% in the fourth quarter, following 2.3% in the previous quarter. 

On Monday, the European Commission said in its Winter Interim forecast that the currency block is set to avoid a technical recession this year and revised higher its estimate to 0.9% growth from the previous estimate of 0.3% increase. 

 

France's Jobless Rate Dropped to 14-year Low 

France's jobless rate dropped in the fourth quarter to the lowest level since first quarter 2008, excluding the sharp decline in the second quarter 2020, the statistical office INSEE reported Tuesday.     

The ILO jobless rate declined to 7.2% in the fourth quarter, down from 7.2% in the third quarter, after unemployment decreased 45,000 from the previous quarter to 2.2 million.  

Employment rate of people aged 15 and 64 rose to 68.3%, a record high since the statistical office INSEE began collecting data. 

Full-time employment rate in the fourth quarter increased to 57.2%, a record high since 2003 when the statistical office INSEE started collecting data on a quarterly basis.   

 

European Markets 

The DAX index decreased 16.78 points to 15,380.56, the CAC-40 index increased 5.22 points to 7,213.81 and the FTSE 100 index added 6.25 points to 7,953.85. 

The euro edged higher to $1.073, the British pound traded at $1.217 and the Swiss franc closed at 92.14 U.S. cents. 

The yield on 10-year German Bunds increased to 2.44%, French bonds to 2.88%, the UK Gilts to 3.52% and Italian bonds to 4.23%. 

Brent crude oil decreased 82 cents to $ 85.79 a barrel and the Dutch TTF natural gas spot price traded up 1.3% to Є52.39 per MWh. 

 

Europe Movers 

TUI AG increased 1.7% to 173.70 pence after the holiday tour operator said pre-bookings for summer and winter travels are ahead of pre-pandemic levels. 

Revenue in the fiscal year 2023 first quarter ending in December increased to €3.8 billion compared to  €2.4 billion a year ago. 

The number of customers increased to 3.3 million, an increase of 1.0 million from the previous year and 93% of the corresponding period in 2019. 

Operating loss in the quarter shrank to €153.0 million from €273.6 million a year ago. 

With 8.7 million bookings for the winter and summer travels, booking volume in the last four weeks are 5% higher for winter and 10% for summer travel compared to pre-pandemic levels. 

At the end of the quarter, net debt increased to €5.2 billion from €5.0 billion a year ago.  

ThyssenKrupp AG declined 10.8% to €6.31 after the German company said operating profit fell by nearly one third in the fiscal first quarter. 

Sales in the first quarter matched the previous quarter of  €9 billion and new orders declined to €9.2 billion from €10.4 billion in the corresponding period a year ago. 

Adjusted operating earnings or adjusted EBIT declined to €254 million, below the prior-year level of €378 million on higher raw materials costs. 

The company reiterated its fiscal year 2023 outlook. 

"Automotive Technology improved order intake by 27% to €1.4 billion and sales by 18% to €1.3 billion. 

Strong customer demand was especially evident in the automotive original equipment business, but the supply of semiconductors remained limited," the company added in its earnings statement. 

 Overall net income declined to €98 million in the fiscal first quarter from €122 million a year ago. 

After deducting minority interest, net income declined to €75 million from €106 million and earnings per share dropped to €0.12 from €0.17 a year ago.

Coca-Cola HBC increased 5.1% to 2,040.29 pence after the beverage company said comparable net income in the year 2022 rose 8.1% from a year ago. 

Unit sales increased 12.4% to 2.7 million cases from 2.4 million and net sales increased 28.3% to €9.2 billion from €7.2 billion a year ago. 

Net income in the year declined 24.1% to €415 million from €547.2 million but comparable profit increased 8.1% to €624.9 million from €578.1 million a year ago. 

Coca-Cola volumes grew 9.1%, led by ongoing strong performance from Coke Zero, while Fanta grew 3.8% and Sprite 4.7%, outside of Russia and Ukraine.