French Index Hits New High, German Index Extends 2023 Gain

Bridgette Randall
13 Apr, 2023
Frankfurt

European market indexes traded at one-month high as investors looked beyond the recent banking crisis and scaled new peaks in Germany and France. 

The German benchmark index traded above 15,700 and extended this year's gain to 11.7% and the French index traded at a new high and extended 2023's gain to 13.3%. 

Investors have been bidding up stocks after months of inflation and economic slowdown worries. The elevated inflation and economic slowdown are not preventing large corporations from reporting rising sales and profits. 

LVMH, the largest luxury products maker in the world reported a surge in first quarter sales and the British grocery store Tesco forecasted flat profit in the new fiscal year. 

 

German Inflation In March Weakened but Stayed Elevated 

German inflation rate weakened in March but stayed elevated, the latest data from Destatis showed Thursday. 

Consumer price index in March rose at a slower annual pace of 7.4%, after rising at 8.4% in February and January. 

On a monthly basis, the inflation index rose 0.8%. 

On a harmonized basis, the inflation index increased 7.8% from a year ago and 1.1% from the previous month. 

"The inflation rate has weakened, but remains at a high level," says Ruth Brand, President of the Federal Statistical Office. 

Food price increase accelerated to 22.3% in March, following 21.8% in February and 20.2% in January. 

Inflation in March excluding energy prices was 7.8% and excluding food and energy prices was 5.8%. 

 

UK Economy Stagnates After Strikes Dip Service Output 

The UK economy stagnated in February and January's growth was upwardly revised to 0.4%, the Office for National Statistics reported Thursday. 

Growth in January was revised up from the previous estimate of 0.3% increase. 

GDP increased 0.1%% in the three months to February and ahead by 0.3% to the pre-coronavirus levels. 

Industrial production declined 0.2% in February after falling 0.5% in January but services output fell 0.1% following strikes in education and public sector following the rise of 0.7% in January respectively.  

On a yearly basis, GDP accelerated 0.5% in February after rising at 0.4% in January. 

 

Europe Indexes & Yields 

The DAX index decreased 12.69 points to 15,690.25, the CAC-40 index added 0.9% to 7,465.47 and the FTSE 100 index gained 0.91 points to 7,825.75. 

The yield on 10-year German Bunds held at 2.36%, French bonds at 2.88%, the UK gilts at 3.57% and Italian bonds at 4.22%. 

The euro inched higher to $1.10, the British pound edged higher to $1.25 and the Swiss franc edged up to 89.08 cents. 

Brent crude oil fell 64 cents to $86.68 a barrel and the Dutch TTF natural gas fell 88 cents to Є42.0 per MWh. 

 

Europe Movers 

Oxford Instruments Plc increased 3.9% to 2,540.0 pence after the maker of advanced technology products for industrial companies said sales are ahead of expectations in the current fiscal year.  

LVMH Moet Hennessy Louis Vuitton SE increased 4.4% to €873.30 after the luxury products maker said first quarter sales increased 17% from a year ago partly driven by the surge in China demand and the rebound in international travel. 

Imperial Brands Plc decreased 1.4% to 1,851.50 pence after the cigarette maker forecasted a decline in first-half revenue following its exit from Russia.  

Tesco Plc increased 1.7% to 272.0 pence after the UK-based grocer reported a rise in annual sales. The company also forecasted flat profit in the new fiscal year. 

Revenue in the fiscal year 2023 ending in February rose to £65.8 billion from £61.3 billion and after-tax net income declined to £744 million from £1.48 billion and diluted earnings per share fell to 10.08 pence from 19.64 pence a year ago. 

"We expect to be able to deliver a broadly flat level of retail adjusted operating profit in 2023-24 and retail free cash flow  within our target range of £1.4 billion to £1.8 billion," said the company in the earnings statement released Thursday.