European Markets On Hold, German Business Confidence Improved

Bridgette Randall
24 Apr, 2023
Frankfurt

European markets traded in a tight range and investors digested a fresh batch of earnings amid lingering economic slowdown worries. 

Market sentiment was cautious in trading in Paris, Frankfurt and London and investors reacted to domestic corporate earnings. 

In cautious trading, resource and energy stocks led the decliners and tech stocks were in focus ahead of the release of earnings from mega-cap companies Meta, Alphabet, Amazon and Microsoft this week. 

Across Europe, banks were in focus ahead of the earnings releases this week from Barclays, Credit Suisse, Deutsche Bank, Santander and UBS. 

In the region's economic news, German business confidence showed an improvement for the sixth month in a row, Ifo Institute reported Monday. 

The overall German IFO business climate index increased to 93.6 in April from 93.2 in March, the highest level since February last year. 

The current situation index eased to 95.0 from 95.4 and expectations index, which tracks business outlook in the coming months, improved to 92.2 from 91.0 in March. 

 

Indexes & Yields 

The DAX index decreased 5.12 points to 15,876.54, the CAC-40 index dropped 9.51 points to 7,567.49 and the FTSE 100 index declined 4.73 points to 7,909.40. 

The yield on 10-year German Bunds edged higher to 2.49%, French bonds to 3.05%, the UK gilts to 3.78% and Italian bonds to 4.36%. 

The euro inched higher to $1.101, the British pound to $1.24 and Swiss franc to 88.96 cents. 

Brent crude oil fell 14 cents to $81.51 and the Dutch TTF natural gas futures fell 74 cents to $39.42 per MWh.  

 

Europe Stock Movers 

Philips NV gained 11.2% to €19.28 after the consumer electronics and technology company reported higher operating earnings and sales in its first quarter. 

Group sales increased 2% to €4.17 billion from €3.92 billion and adjusted EBITA increased to 359 million from 243 million a year ago.   

Comparable sales increased 6% driven by a rise in double-digit sales in its diagnostics and treatment unit and low single-digit increase in sales in connected care businesses. 

Net loss increased after the company set aside 575 million related to the settlement of a class action lawsuit stemming from the Respironics recall in the U.S. 

Net loss expanded to 665 million from 151  million and loss per share rose to 75 cents from 14 cents a year ago. 

Software AG soared 49.4% to €29.84 after the German software company agreed to a deal from the private equity firm Silver Lake. 

Credit Suisse Group AG increased 2.1% to  Sfr 0.81 after the Swiss bank said net asset outflow in the first quarter was Sfr 61 billion or $68 billion. 

Resource and energy companies traded lower after crude oil and natural gas prices eased on the demand worries. 

BP Plc, TotalEnergies SE, Repsol SA, Shell Plc and Eni SpA dropped between 0.5% and 1.3% after Brent crude oil and natural gas prices eased. 

Salzgitter AG decreased 0.2% to €36.82 after the German steel company said first quarter earnings plunged nearly 50% but the company reaffirmed its full-year outlook. 

The company estimated profit in the first quarter of €183 million compared to €465 million in the similar period in 2022. 

The company reiterated its 2023 sales of €13 billion compared to €12.6 billion in 2022 and earnings before interest, taxes, amortization and depreciation or EBITDA between €750 million and €850 million.