European Markets Rebounded, Crude Oil Dropped to 5-month Low

Bridgette Randall
24 Aug, 2023
Frankfurt

Market indexes in Europe traded higher after chip stocks rallied and tech investors hunted for bargains. 

Popular averages in London, Paris and Frankfurt advanced in volatile trading after chipmakers jumped more than 2% on the hopes that the record quarterly results reported by Nvidia are indicative of a broader industry trend. 

Traders drove up chipmakers in Europe, Asia and in the U.S.

Market participants also reviewed the volatile trading pattern in the oil and natural gas markets, which has a deeper impact on the inflation path. 

Crude oil prices dropped to a four month low on the rising imbalance between demand and supply. China's uneven economic rebound is having a negative impact on the expected demand growth for crude oil. 

Moreover, natural gas prices dropped about 4% after talks between union leaders and LNG producers in Australia indicated that a long strike may be averted.  

Closer to the region, France's manufacturing confidence index deteriorated to the lowest since January 2021 on weak new orders largely because of weakness in exports and production. 

The manufacturing sentiment index declined to 96 in August from 101 in July, the statistical agency INSEE reported Thursday. 

 

Europe Indexes & Yields

The DAX index increased 0.3% to 15,779.91, the CAC-40 index increased 0.4% to 7,278.76 and the FTSE 100 index edged higher 0.4% to 7,344.88.

The yield on 10-year German bonds decreased to 2.51%, French bonds traded lower to 3.06%, the UK gilts edged down to 4.43% and Italian bonds fell to 4.18%.

The euro edged lower to $1.082, the British pound to $1.268 and the U.S. dollar fetched 88.07 Swiss cents.

Natural gas prices traded volatile after local reports showed some progress between the workers' unions and Woodside Energy and Chevron in averting a long strike at LNG terminals. 

Brent crude increased $0.26 to $83.46 a barrel and the Dutch TTF natural gas fell €3.91 to €32.88 per MWh.

 

Europe Stock Movers

European chipmakers rallied after Nvidia reported record quarterly sales. 

ASML Holding NV jumped 0.6% to €630.20, Aixtron SE advanced 1.% to €36.50, BE Semiconductor Industries NV jumped 2.5% to €108.60 and ASM International NV increased 1.7% to €465.15. 

UBS Group AG jumped 2.5% to CHF 21.86 after the company said its group company Credit Suisse dropped its plan to list its real estate fund citing weak demand from Swiss investors.   

Norwegian Air Shuttle ASA dropped 7% to €0.84 after the discount air carrier reported a decline in second quarter profit. 

Harbour Energy PLC declined to 231.60 pence after the company narrowed its production forecast narrowed towards the lower end of its estimate

Hunting Plc decreased 9.6% to 230.0 pence after the company said it plans to sell its non-core production and exploration assets in order to further its business restructuring. 

Hays Plc increased 0.3% to 103.60 pence and the recruiting company appointed a new chief executive.