European Markets Rebounded, Eurozone Retail Orders Declined

Bridgette Randall
05 May, 2023
Frankfurt

European stock markets rebounded on the final day of the week and major indexes are set to close down after a week of volatile trading.

Investors shifted focus to corporate earnings after a busy week of economic data and central banks actions.  

In the region's economic news, retail sales dropped in March after higher food prices and elevated energy costs sapped consumer spending. 

German factory orders dropped to a three-year low after volatile transportation and defense orders fell sharply in March after surging in February. 

 

Eurozone Retail Sales Dropped 

The Euro Area retail sales decreased 1.2% in March from the previous month and eased 1.1% in the European Union, Eurostat reported Friday. 

Seasonally adjusted retail sales dropped at a faster pace than 0.2% in February after higher food prices and interest rates weighed on the overall spending. 

Across the Eurozone, retail sales dropped 2.4% in Germany, 1.4% in France, 0.3% in Italy but rose 0.7% in Spain.  

On an annual basis, the calendar adjusted retail sales index decreased 3.8% in the euro area and 4.1% in the European Union.

 

Germany Factory Orders Drop to 3-year Low On Volatile Large Orders 

German new factory orders, adjusted for prices and season factors, plunged 10.7% from the previous month in March, the Federal Statistics Office or destatis reported Friday. 

February orders were downwardly revised to an increase of 4.5%. 

The March orders declined the most since the peak of the coronavirus pandemic in April 2020, driven by a sharp decline of 47.4% in miscellaneous vehicle construction which includes orders for ships, rail locomotives, spacecrafts and army vehicles. 

Large-scale orders had risen 55% in February from the previous month. 

Excluding large-scale transportation and defense orders, new orders declined 7.7% in March from the previous month. 

While new orders in the capital goods sector decreased 14.1% and in the intermediate goods area 7.5% in March 2023 compared to the previous month, new orders in the consumer goods sector increased 1.2%. 

Preliminary real turnover in the manufacturing sector declined 2.9% in February after rising 1.5% in February, but rose 3.7% from a year ago. 

 

Europe Indexes & Yields 

The DAX index increased 0.7% to 15,839.18,  the CAC-40 index added 0.4% to 7,370.86 and the FTSE 100 index advanced 0.4% to 7,734.90. 

The yield on 10-year German Bunds inched up to 2.26%, French bonds traded slightly higher to 2.87%, the UK gilts inched higher to 3.76% and Italian bonds advanced to 4.19%.

The euro edged higher to $1.102, the British pound to $1.267 and the Swiss franc to 89.13 cents.

Brent crude rose $1.72 to $74.21 a barrel and the Dutch TTF natural gas increased €0.35 to €36.00 per MWh.

 

Europe Stock Movers 

Adidas AG increased 7.3% to €167.86 after the German sportswear maker reported quarterly results ahead of expectations. 

IAG or International Consolidated Airlines Group increased 1.7% to 149.55 pence after the parent of British Air and Iberian Air narrowed its first quarter pre-tax loss. 

The airline group also lifted its full-year 2023 adjusted operating earnings outlook. 

Air France KLM SA decreased 1.7% to  €1.43 after the airline group reported a first quarter loss of €306 million. 

SGL Carbon SE declined 0.6% to €8.75 after the company forecasted flat sales in 2023 compared to the previous year. 

Intercontinental Hotels Group decreased 1.5% to 5,432.0 pence after the company said group chief executive Keith Barr plans to step down from the office and resign from the company board. 

In addition, the company said its annual 2023 revenues are likely to exceed its previous estimate. 

Halma plc declined 0.1% to 2,385.0 pence and the company agreed to acquire Poland-based Sewertronics for as much as €59 million or £52 million.