European Markets Extended Gains, Spanish Retail Sales Accelerated In July

Bridgette Randall
29 Aug, 2023
Frankfurt

Stocks in Europe extended gains for the second day this week and investors focused on regional economic issues. 

Market indexes in London rebounded after traders returned from a late summer bank holiday and bid up resource and energy stocks after investors reacted for the first time the China's capital market stimulus measures on Sunday. 

Popular averages in Paris and Frankfurt extended gains for the second day after banks and energy stocks led the gainers. 

Investors are divided about the future rate path in the Euro Area and interest rates are still not restrictive enough to bring down inflation to the 2% level preferred by the European Central Bank. 

While central bankers are talking tough but policymakers are showing no urgency in bringing down inflation, after food, energy and housing price inflation shows no signs of abating.  

The ECB President Christine Lagarde and others speak in hawkish tones but central bankers have avoided giving out a time table in lowering inflation below 2% level. 

 

Spain's Retail Sales Accelerated In July 

Spain's retail sales accelerated 7.3% in July from the upwardly revised 6.5% annual rate in June, the National Statistics Institute or INE reported Tuesday.  

Retail sales increase was driven by a rise in non-food stores sales after personal equipment sales increased to an annual rate of 15.3% from 13.8%, other goods sales rose to 14.1% from 12% and home equipment sales advanced 1.2% from flat in the previous month. 

On a monthly basis, retail sales inched up 0.2% after rising 0.3% in June. 

 

Europe Indexes & Yields

The DAX index increased 0.4% to 15,849.79, the CAC-40 index advanced 0.4% to 7,351.61 and the FTSE 100 index 1.4% 7,440.19.

The yield on 10-year German bonds decreased to 2.57%, French bonds traded lower to 3.08%, the UK gilts edged down to 4.46% 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 $1.258 and the U.S. dollar fetched 88.46 Swiss cents.

Brent crude decreased $0.76 to $85.18 a barrel and the Dutch TTF natural gas decreased €2.23 to €36.18 per MWh.

 

Europe Stock Movers

Technip Energies NV increased 0.8% €21.27 after the company was awarded a hydrogen production facility  at its Kwinana biorefinery in Western Australia.

Evotec SE jumped 1.5% to €21.03 after the German drug and discovery firm narrowed its second quarter loss. 

NN Group NV advanced 8.9% to €37.57 after the Dutch insurance group said its solvency improved in the first six months of 2023.

Standard Chartered PLC inched up 1.4% to 721.20 pence after the British lender agreed to sell its global aviation finance leasing unit. 

Bunzl  Plc added 2.7% to 2,798.0 after the business supplies distributor forecasted 2023 adjusted operating earnings in constant currencies to be moderately higher than in 2022.   

Antofagasta, Anglo American and Glencore increased between 1% and 2% after copper prices rose and the dollar edged lower.