Rate Decision Anxieties Keep European Indexes In Check, Euro Area Industrial Output Eased

Bridgette Randall
13 Sep, 2023
Frankfurt

Stock markets in Europe traded down after weak regional economic data added to investor anxieties ahead of interest rate decisions on Thursday. 

Popular indexes in Frankfurt, London and Paris eased lower and the euro dropped to a three-month low ahead of the widely anticipated 25 basis points rate hike by the European Central Bank. 

 

Euro Area Industrial Production Declined In July 

Industrial output in the Euro Are declined 1.1% from the previous month in July, Eurostat reported Wednesday. 

The weakness in durable goods production overshadowed the increase in energy production and the rebound in intermediate goods and non-durable goods output. 

Industrial production declined 2.2% in July, and fell for the fifth month in a row and fell six months in the last nine months.  

 

UK GDP Shrank In July 

The U.K. economy shrank at the fastest pace in seven months in July, the Office for National Statistics reported Wednesday. 

Weakness in the service sector of 0.5% was the main contributor to the decline in overall activities, driving the weakness in healthcare and computer programming related activities. 

GDP decreased 0.5% from the previous month reversing the gain of 0.5% in June.

For the three months to July, GDP expanded 0.2%.  

 

Europe Indexes & Yields

The DAX index decreased 0.8% to 15,593.30, the CAC-40 index eased 0.1% to 7,269.66 and the FTSE 100 index inched down 0.4% to 7,499.80.

The yield on 10-year German bonds increased to 2.68%, French bonds traded higher to 3.22%, the UK gilts edged up to 4.41% and Italian bonds rose to 4.47%.

The euro edged lower to a three-month low to $1.071, the British pound to $1.243 and the U.S. dollar fetched 89.25 Swiss cents.

Brent crude decreased $0.47 to $92.52 a barrel and the Dutch TTF natural gas decreased €0.78 to €35.48 per MWh.

 

Europe Stock Movers

Inditex SA decreased 2.4% to €35.05 despite the parent of Zara reporting a 40% jump in profit in the first-half. 

BP Plc decreased 1.2% to 516.30 pence and chief executive Bernard Looney resigned over personal relationships with colleagues. 

Renault SA advanced 1.9% to €37.43 and the European Commission launched an investigation into subsidies received by electric vehicle makers in China. 

Europe is "Open to competition but not for a race to the bottom," said European Commission President Ursula von der Leyen. 

Hunting Plc jumped 4.4% to 270.50 pence after the engineering company reiterated its fiscal 2023 and 2024 outlook and forecasted growth for the rest of the decade. 

Aviva Plc rose 2.9% to 387.20 pence after the British insurance company said it plans to exit from its Singlife joint venture. 

Aviva plans to sell its 25.9% stake in Singapore Life Holdings and two debt securities to Japan based Sumitomo Life for £800 million.