European Markets Extended Weekly Gains, Industrial Output Slowed

Bridgette Randall
13 Jul, 2023
Frankfurt

European markets extended weekly gains and investors reviewed industrial output data in the Euro Area. 

Major averages in Frankfurt, Paris and London advanced on hopes that the European Central Bank may be nearing its rate hike cycle following the easing of inflation. 

The annual retail price inflation eased to 4.5% in June from 5.1% May, but remained well above the central bank's target rate of 2%, France's statistical agency INSEE reported Thursday. 

The ongoing decline in petroleum products by 17.2% compared to 9.7% in April, drove energy prices by 3% compared to 2% in May. 

In other economic news, the UK economy contracted less than expected in May. 

Real GDP declined 0.1% in May, reversing 0.2% rise in April, the Office for National Statistics reported Thursday. 

 

Euro Area Industrial Output Slowed In May 

Industrial production in the Euro Area eased to 0.2% increase in May from 1.0% rise in April, Eurostat reported Thursday. 

On a yearly basis, industrial production declined 2.2% in May after rising 0.2% in April. 

Capital goods production increased 1.0% in May following a 14.7% surge in April, and intermediate goods output rose 0.5%, rebounding from a 0.9% decline in the previous month. 

Durable goods output rose 0.5% compared to a decline of 2.8% in the previous month and non-durable  consumer goods  output rebounded 0.3% from a decline of 3.6%. 

 

Europe Indexes & Yields

The DAX index increased 0.5% to 16,110.39, the CAC-40 index advanced 0.7% to 7,383.67 and the FTSE 100 index advanced 0.4% to 7,445.35.  

The yield on 10-year German Bunds inched higher to 2.45%, French bonds traded lower to 2.99%, the UK gilts edged up to 4.45% and Italian bonds increased to 4.13%.

The euro edged higher to $1.117, the British pound to $1.304 and the U.S. dollar fetched 90.04 Swiss cents

Brent crude increased $0.06 to $80.18 a barrel and the Dutch TTF natural gas increased €0.03 to €26.67 per MWh.

 

Europe Stock Movers

Enel SpA rose 1.4% to €6.32 after the Italian energy generator and electricity grid operator said its subsidiary Enel Green Power SpA has agreed to sell 50% stake in its two subsidiaries Enel Green Power Australia Pty Ltd and Enel Green Power Australia Trust. 

The company agreed to sell stakes to Inpex Corporation for €400 million.  

Homebuilders in London traded lower after Barratt Developments after the company warned of a challenging market environment and further slowdown in demand.

Barratt Developments PLC dropped 2.5% to 407.70 pence, Persimmons declined Persimmon Plc declined 0.6% to 1,044 pence and Taylor Wimpey Plc declined 1.7% to 103.10 pence. 

Casino Guichard Perrachon SA declined 5.2% to €3.15 after the estimated comparable sales in the second quarter fell 6.6% because of price cuts reflecting a tough market environment.