German Industrial Output Dropped, Third Monthly Decline In UK Home Prices

Bridgette Randall
07 Aug, 2023
Frankfurt

European markets struggled and market indexes retained downward bias after the release of German industrial production and UK home sales data. 

Market averages declined on the first day of a new following losses in the previous week after bond yields rose and the euro dropped to a one-year low. 

German industrial production declined more than expected in June on weak auto production. 

Industrial output declined 1.5% from the previous month and fell 1.7% from a year ago in June, the Federal Statistics Office or Destatis reported Monday. 

In other news, the UK home prices fell for the third month in a row in July on rising borrowing costs and elevated home prices. 

The Halifax home price index declined 2.4% in July after falling 2.6% in June and average home price eased to £285,044, lower than the peak of £293,992 reached last August.

“The continued affordability squeeze will mean constrained market activity persists, and we expect house prices to continue to fall into next year. Based on our current economic assumptions, we anticipate that being a gradual rather than a precipitous decline. 

And one that is unlikely to fully reverse the house price growth recorded over recent years, with average property prices still some £45,000 (+19%) above pre-Covid levels,” said Kim Kinnaird, Director, Halifax Mortgages.

 

Europe Indexes & Yields

The DAX index decreased 0.4% to 15,891.68, the CAC-40 index fell 0.2% to 7,303.29 and the FTSE 100 index dropped 0.5% to 7,524.96.  

In the last week, the DAX index declined 3%, the CAC-40 fell 2.8% and the FTSE 100 index dropped 2.2%. 

The yield on 10-year German bonds decreased to 2.58%, 8rench bonds traded lower to 3.15%, the UK gilts edged up to 4.45% and Italian bonds decreased to 4.28%.

The euro edged lower to $1.097, the British pound to $1.271 and the U.S. dollar fetched 87.69 Swiss cents.

Brent crude decreased $0.74 to $85.49 a barrel and the Dutch TTF natural gas increased €0.81 to €29.72 per MWh.

 

Europe Stock Movers

UK home builders declined after the release of the Halifax housing report. 

Barratt Developments PLC decreased 0.4% to 456.40 pence, Taylor Wimpey plc declined 0.8% to 118.0 pence and Persimmon Plc fell 0.6%. 

Weak base metal prices weighed on mining stocks on the market jitters ahead of the inflation and international trade balance data from China later this week. 

Anglo America, Antofagasta and Glencore fell between 1% and 3%. 

Clarkson Plc declined 2.7% to 2,795.0 pence after the shipping services provider reported price and volume softening trends in some sectors. 

UNITE Group Plc fell 2.2% to 941.50 pence after the student housing provider's debt rating was downgraded by a rating agency.  

LSL Property Services Plc dropped 10.6% to 252.50 pence after the mortgage and valuation services provider issues a profit warning citing mortgage market weakness in refinancing and new mortgage sale. 

Revenue in the first-half declined to £104 million from £160.9 million and operating profit plunged to £3.5 million from £14.2 million.    

Siemens Energy AG dropped 6.7% to €14.51 after the company reported a wider loss in the latest quarter and lowered its full-year outlook. 

Aurubis AG plunged 10.5% to €75.98 after the company reported weaker-than-expected results in the nine months of fiscal 2023.