5th Weekly Gain In European Markets, Private Sector Activities Rebounded

Bridgette Randall
21 Apr, 2023
Frankfurt

European markets struggled and investors digested a fresh batch of earnings amid growing economic anxieties. 

The latest PMI surveys in the Euro Area and UK showed service sector growth accelerated in April but manufacturing remained under pressure on weakening demand for goods. 

The HCOB Eurozone Composite PMI increased to 54.4 in April, highest in 11 months. 

The HCOB Germany Composite PMI rose to 53.9 in April from 52.6 in March, indicating accelerating business activities in the private sector after service sector activities rose to a 12-month high. 

The S&P Global/CIPS UK Composite PMI increased to 53.9 in April from 52.2 in March, indicating the fastest pace of expansion since April 2022.  

The index above 50 indicates expansion and below 50 shows deceleration. 

Investors also welcomed positive quarterly results from EssilorLuxottica and Mercedes Benz reported sharply higher industrial free cash flow. 

 

Poor Weather Contributed to March Retail Sales Decline In UK  

Retail sales in the U.K. fell more than expected in March, the Office for National Statistics reported Friday.

Poor weather contributed to stretched consumer budgets, negatively impacting retail sales.  

March retail sales, including motor fuel, decreased 0.9% from the previous month after rising for two months in a row. 

February retail sales growth was downwardly revised to 1.1% from the previous estimate of 1.2%. 

Retail sales, excluding motor fuel, declined 0.6% from the previous month, after rising 2.1% in February. 

Retail sales volume in the three months to March  increased 0.6% from the previous three-month period.   

 

Europe Indexes & Yields 

European markets were in holding patten in Friday's trading but benchmark indexes are set to close higher for the fifth week in a row. 

The DAX index declined 0.3% to 15,755.08, the CAC-40 index decreased 1.09 points to 7,537.62 and the FTSE 100 index added 7.48 points to 7,910.09. 

The yield on 10-year German Bunds eased to 2.44%, French bonds decreased to 2.96%, the UK gilts to 3.71% and Italian bonds to 4.32%.

The euro held at $1.096, the British pound at $1.284 and the Swiss franc  

Brent crude edged up 11 cents to $81.09 a barrel and the Dutch TTF natural gas futures rose 36 cents to Є40.92 per MWh.  

 

Europe Stock Movers 

Glencore Plc decreased 1.1% to 496.54 pence and the resource company reported first quarter production that met investors' expectations. 

Coal production declined 6% to 26.9 million tons and zinc production fell 15% to 205.3 kt or (thousands of tons) and copper production eased 5% to 244.1 kt. 

Holcim AG declined 0.3% to Sfr 58.74 and the Swiss cement and construction materials company reiterated its full-year outlook. 

Tele2 AB declined 1.1% to SEK 104.70 after the company reported less-than-expected 3% increase in first quarter revenue from a year ago. 

Mercedes Benz Group AG rose 0.4% to €68.46 after the luxury automaker reported "strong" first quarter preliminary results. 

Earnings before interest and taxes rose to €5.5 billion, largely driven by vans division and industrial free cash flow increased to €2.2 billion, surpassing market expectation of €1.2 billion. 

SAP SE increased 1.3% to €117.14 after the German software company lowered its annual outlook following the sale of its Qualtrics unit. 

EssilorLuxottica SA increased 6.6% to €187.0 after the French-Italian company reported a first quarter sales increase driven by the sales rebound in China.