Economic Growth Worries Keep European Investors On Sidelines

Bridgette Randall
26 Apr, 2023
Frankfurt

European markets traded down on economic worries despite improving corporate performance in the region. 

Market indexes were on the defensive for the second week in a row on the worries that higher interest rates and slowing business activities may negatively impact corporate earnings. 

The latest batch of earnings suggested positive performance from companies in France, Germany and the UK. 

The forward looking German consumer sentiment index improved to -25.7 for May from the revised prior reading of 29.3 in April, GfK Institute's data showed Wednesday.  

The consumer sentiment was the highest since April 2022, reflecting higher income expectations and sharply lower energy inflation.  

 

Indexes & Yields 

The DAX index decreased 0.6% to 15,774.25, the CAC-40 index dropped 0.9% to 7,466.99 and the FTSE 100 index declined 0.3% to 7,871.08. 

The yield on 10-year German Bunds eased to 2.34%, French bonds to 2.92%, the UK gilts to 3.68% and Italian bonds to 4.23%. 

The euro edged higher to $1.10, the British pound to $1.246 and the Swiss franc to 88.91 cents.

Brent crude rose 5 cents to $80.83 a barrel and the Dutch TTF natural gas fell €1.38 to €38.45 per MWh. 

 

Stock Movers 

Danone SA increased 1% to €61.04 after the French yogurt and food products maker lifted its 2023 sales outlook. 

Dassault Systemes SE dropped 7.8% to €34.51 despite the French software company reporting quarterly results that matched market expectations. 

Orange SA increased 1.9% to €11.66 after the French mobile telecom operator reported rising sales in the first quarter and the company reiterated its 2023 sales outlook. 

Safran SA fell 2.2% to €138.90 despite the aerospace company reporting sales increase of  29.4% to €5.3 billion, mainly fueled by propulsion and aircraft Interiors activities. 

As a part of its stock repurchase program for 9.4 million shares, the company has acquired 6.9 million shares and announced its plan to acquire €350 million of its shares between April 11 and June 9. 

Standard Chartered Plc rose 1.4% to 629.0 pence after the UK-based bank reported pre-tax profit in the first quarter increased 23%. 

Operating revenue in the first quarter rose 8% to $4.4 billion and pre-tax income rose to $1.7 billion from $1.4 billion and net interest margin increased 5 basis points to 1.63%.