European Markets Looked Down 7th Consecutive Day, GDP Growth Revised Lower

Bridgette Randall
07 Sep, 2023
Frankfurt

European markets turned slightly higher after investors returned for bargain hunting. 

Market indexes in London, Paris and Frankfurt attempted to rebound after six days of losses in a row amid worries of looming global economic slowdown and rate hikes. 

China's exports and imports shrank and trade surplus declined in August after exports to the European Union, ASEAN region and the U.S. fell in double digits. 

 

Euro Area First Quarter GDP Growth Revised Lower

The Euro Area GDP growth in the second quarter was revised lower to 0.1% from the previous quarter, Eurostat reported Thursday. 

The economic growth was downwardly revised from the initial estimate of 0.3%. 

On an annual basis, the GDP growth was revised lower to 0.5% from the initial estimate of 0.6% and slower than 1.1% in the first quarter ending in March. 

From the previous quarter GDP stalled in Germany, expanded 0.5% in France, rose 0.4% in Spain but contracted 0.4% in Italy.  

The currency bloc's economy is likely to dip into a recession with the weak outlook for the German economy. 

German industrial production declined 0.8% from the previous month in July following a downwardly revised 1.4% fall in June, the Federal Statistics Office or DeStatis reported Thursday. 

Industrial production declined after output for capital goods fell 2.9%, consumer goods eased 1% and industrial goods decreased 0.7%. 

On an annual basis, production fell 2.2% after falling 1.5% in June.  

 

Europe Indexes & Yields

European markets have been on the decline for the last five weeks on the worries of economic slowdown and higher interest rates that could dip the economy into a deeper recession. 

The DAX index increased 0.05% to 15,748.90, the CAC-40 index increased 0.3% to 7,216.67 and the FTSE 100 index inched up 0.3% to 7,444.17.

The yield on 10-year German bonds increased to 2.63%, French bonds traded higher to 3.16%, the UK gilts edged up to 4.47% and Italian bonds rose to 4.36%.

The euro edged lower to $1.076, the British pound to $1.246 and the U.S. dollar fetched 89.23 Swiss cents.

Brent crude decreased $0.63 to $89.93 a barrel and the Dutch TTF natural gas increased €1.34  to €34.42 per MWh.

 

Europe Stock Movers

Resource companies traded volatile with a downward bias after China's exports and imports declined in August. 

Glencore, Antofagasta and Anglo America declined between 1% and 2%. 

Nestle SA increased 0.5% to CHF 104.76 and the company agreed to acquire Brazilian chocolate brand Kopenhagen. 

Direct Line Insurance Group Plc soared 16% to 174.15 pence after the home and automobile insurance company posted an operating loss in the first-half but forecasted improved earnings in 2024. 

Deutsche Telekom AG declined 0.3% to €19.87 after its subsidiary T-Mobile U.S. announced a stock repurchase plan of up to $19 billion between the fourth quarter 2023 and the end of 2024. 

Smurfit Kappa Group Plc decreased 1.6% to 3,168.0 pence after the UK-based packaging company is in potential merger discussion with the U.S. rival WestRock. 

The news was first reported by the Wall Street Journal. 

SAP SE jumped 0.7% to €129.88 after the German software company said it acquired software management company LeanIX without disclosing terms.

ThyssenKrupp AG decreased 1.8% to €7.08 after the company said chief financial officer Klaus Keysberg will step down from management duties next year.