European Stocks and Bond Yields Edged Higher

Bridgette Randall
28 Aug, 2023
New York City

European markets trade higher and bond yields edged up and investors search for bargains in industrial and financial sector stocks. 

Market averages in London, Paris and Frankfurt advanced on the first day of a new week after China announced new measures to support capital markets. 

China's finance ministry cut stamp duty by half to 0.05% and lowered margin requirement to 80% from 100%, hoping to revive market confidence and support flagging markets. 

Market indexes in Hong Kong are down about 9% in the year so far, the worst performing market among 15 leading markets around the world and the Shanghai Composite index fell 1% in the period. 

The measures are likely to fall short in reviving market confidence as consumer confidence remains weak and corporations are looking to cut costs amid falling exports and weakening corporate profits.

But at least in today's trading, luxury stocks in Paris and resource stocks in London advanced on the hopes that China's measures will revive sales. 

 

Europe Indexes & Yields

The DAX index increased 0.4% to 15,699.88, the CAC-40 index advanced 0.6% to 7,274.41 and financial markets were closed in London on Monday. 

In the previous week, the DAX index increased 0.4%, the CAC40 index advanced 0.7% and the FTSE 100 index gained 0.5%. 

The yield on 10-year German bonds decreased to 2.57%, French bonds traded lower to 3.10%, the UK gilts edged down to 4.44% and Italian bonds fell to 4.22%.

The euro edged to the lowest level since mid-June on the hopes that the central is more likely to pause its rate hike campaign and assess the impact of the multiple rate hikes on the economy. 

The euro edged lower to $1.081, the British pound to $1.252 and the U.S. dollar fetched 88.43 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 decreased $0.32 to $84.17 a barrel and the Dutch TTF natural gas increased €0.98  to €35.17 per MWh.

 

Europe Stock Movers

Deutsche Bank, Commerzbank, BNP Paribas and Societe Generale jumped more than 1% after the ECB President Christine Lagarde stressed the need the for monetary policy to be restrictive enough. 

Renault SA advanced 1.5% to €36.97 after the French automaker with significant sales in China was in focus following the stimulus measures announced by China's finance ministry. 

French luxury products makers also advanced following China's stimulus news. 

Kering SA jumped 1.4% to €494.30, LVMH advanced 1.2% to €794.80, and Hermes International increased 1.2% to €1,905.0.