European Markets Advanced On Growth Outlook Revision, Euro Area Industrial Output Dropped

Bridgette Randall
15 May, 2023
Frankfurt

European markets advanced after the European Commission revised higher its economic growth outlook for 2023. 

Benchmark indexes traded higher in France and Germany traded higher after the EC lifted its annual economic growth estimate for the European Union to 1.0% from the previous estimate of 0.8% and for the Euro Area to 1.1% from 0.9% respectively. 

Investors overlooked the sharp decline in industrial production in the region in March and the decline in wholesale prices in April. 

 

Euro Area industrial Output Dropped In March 

Seasonally adjusted industrial production in the Euro Area declined 4.1% in March from the previous month, Eurostat reported Monday. 

On a monthly basis, in the Euro Area, production of capital goods fell 15.4%, intermediate goods 1.8%, energy 0.9% and non-durable consumer goods 0.8%, while production of  durable consumer goods rose 2.8%.

On an annual basis in the Euro Area, production of energy fell 6.1%, intermediate goods 4.7%, capital goods 2.1% and durable consumer goods 0.8%, while production of non-durable consumer goods rose 6.8%. 

Industrial output dropped the most since 2020, driven by a significant decline in production of capital goods. 

 

Germany's Wholesale Prices Declined In April

Germany wholesale prices declined 0.5% in April from a year ago, the first fall since December 2020, the Federal Statistics Office reported Monday. 

On an annual basis, the wholesale price index in March increased 2.0% and in February jumped 8.9%.

The annual price decline was mainly driven by the price decrease of mineral oil products by 15.7%, scrap and residual materials 31.5 %, cereals, raw tobacco, seeds and feedstuff 25.2%, ores, metals and semi-finished metal products 20.5% and chemical products 5.4%. 

However, the selling prices in wholesale trade for fruit, vegetables and potatoes  surged 22.0%, building materials and elements 13.9% and living animals 11.4%. 

The wholesale price index declined 0.4% in April from the previous month reversing the 0.2% increase in March. 

 

Europe Indexes & Yields 

The DAX index increased 0.2% or 35.26 points to 15,949.29, the CAC-40 index rose 0.4% or 29.78 points to 7,443.59 and the FTSE 100 index advanced 0.5% or 35.67 to 7,790.29. 

The yield on 10-year German Bunds inched down to 2.29%, French bonds traded slightly lower to 2.88%, the UK gilts inched lower to 3.78% and Italian bonds decreased to 4.18%.

The euro edged higher to $1.087, the British pound to $1.250 and the Swiss franc to 89.60 cents.

Brent crude increased 20 cents to $74.27 a barrel and the Dutch TTF natural gas increased €0.27 to €32.50 per MWh.

 

Europe Stock Movers 

Siemens Energy increased 3.3% to €23.01 after the maker of capital equipment for the power sector revised higher its 2023 outlook.  

Diploma plc increased 2.4% 2,920 pence after the UK-based company reported higher-than-expected pre-tax profit and revenue growth in the first-half. 

British American Tobacco increased 0.3% to 2,717.0 pence after the company appointed finance director Tadeu Marroco as its chief executive officer. 

AXA SA gained 0.3% to € 27.56 after the French insurer reported an increase in gross premium in the first quarter.