European Markets Struggled, Spanish Inflation Accelerated

Bridgette Randall
28 Sep, 2023
Frankfurt

European markets lacked direction amid twin fears of inflation and interest rate path kept investors on sidelines. 

 Benchmark indexes in Paris and Frankfurt hugged  flatline and investors debated policymakers' next step amid persistent inflation. 

Spain's consumer price inflation accelerated for the third month in a row 3.5% in September from 2.3% in August, the National Statistics Institute INE reported Thursday. 

Consumer price inflation soared to a five-month high because of higher fuel and utility prices. 

Core inflation on an annual basis eased to 5.8% in September from 6.1% in August. 

On a monthly basis, consumer price inched higher 0.2%, slower pace than 0.5% in August, the report from the statistical agency showed.   

Oil-driven inflation fears persisted after Brent oil prices hovered near a one-year high of $97 a barrel after the latest U.S. crude oil inventories report showed a sharp decline. 

U.S. crude oil inventories declined 2.2 million barrels last week, significantly higher than the market estimate of a decline in 220,000 barrels. 

Moreover, crude oil inventories at a key storage hub in Oklahoma also dropped to the lowest level since July 2022.  

 

Europe Indexes & Yields

The DAX index increased 0.04% to 15,224.97, the CAC-40 index advanced 0.2% to 7,087.56 and the FTSE 100 index decreased 0.5% to 7,555.62. 

The yield on 10-year German bonds increased to 2.94%, French bonds traded higher to 3.50%, the UK gilts edged up to 4.51% and Italian bonds rose to 4.91%.

The euro edged lower to a three-month low to $1.055, the British pound to $1.22 and the U.S. dollar fetched 91.84 Swiss cents.

Brent crude decreased $1.04 to $96.05 a barrel and the Dutch TTF natural gas edged higher €2.06 to €41.36 per MWh.

 

Europe Stock Movers 

Pepco Group NV plunged 17% to 21.68 zloty after the Polish retailer cut its profit outlook for the second time in a month. 

Ryanair Holdings Plc declined 0.5% to €15.47 after the discount airline cut its winter schedule citing delivery delays in Boeing aircraft.

Banco Santander SA increased 3.0% to €3.60 after the bank said it plans to repurchase 1.2 billion of its own stock. 

Home builders in the UK declined on the worries of rising mortgage rates following the recent increase in bond yields. 

Taylor Wimpey decreased 1.7% to 116.60 pence and Barratt Developments PLC fell 5.9% to 440.42 pence. 

Phoenix Group Holdings Plc decreased 6.5% to 474.60 pence despite the insurance company reporting a narrower pre-tax loss in the first-half of 2023. 

888 Holdings PLC dropped 15% to 93.35 pence after the online gambling platform trimmed its full-year earnings outlook.