European Bond Yield Eased, LVMH Growth Worries Dragged Luxury Stocks

Bridgette Randall
11 Oct, 2023
Frankfurt

Stocks in Europe hovered near flatline as investors prepared for a barrage of earnings next week.

Market indexes in London, Paris and Frankfurt lacked direction and investors debated interest rate paths amid resurgent crude oil and natural gas prices. 

Central bank policymakers are sending mixed signals about the future direction and level of interest rates. 

Policymakers stress their commitments in lowering inflation but show no urgency or set a timetable to bring down inflation, and at the same time inflationary forces are spreading across the wider areas of economy. 

Longer inflation stays elevated, harder it will become to dislodge without dipping the economy into a severe recession. 

 

Europe Indexes & Yields

The DAX index decreased 0.01% to 15,423.79, the CAC-40 index fell 0.6% to 7,121.63 and the FTSE 100 index advanced 0.1% to 7,636.36.

The yield on 10-year German bonds decreased to 2.70%, French bonds traded lower to 3.27%, the UK gilts edged down to 4.32% and Italian bonds rose to 4.68%.

The euro edged lower to a three-month low to $1.06, the British pound to $1.222 and the U.S. dollar fetched 90.32 Swiss cents.

Brent crude decreased $0.35 to $87.29 a barrel and the Dutch TTF natural gas edged higher by €0.75 to €48.70 per MWh.

 

Europe Stock Movers

FirstGroup plc added 4.4% to 153.0  pence after the UK-based bus and rail group lifted its annual profit outlook. 

Marston's Plc declined 4.3% to 27.60 pence despite the pub operator reporting an 11% rise in sales in the fiscal year ending in September. 

Travis Perkins Plc dropped 5.7% to 759.60 pence after the U.K.'s largest distributor of building materials said annual earnings are likely to be below its forecast. 

"With commodity deflation expected to continue and the exit rate from the third quarter indicating further challenging conditions for the balance of the year," the company said in a regulatory filing. 

The company forecasted its adjusted operating profit in the range of £175 million to £195 million for the full-year.

Pagegroup dropped 4.0% to 407.0 pence after the UK-based recruitment company said its annual profits are likely to fall by a third because of ongoing macroeconomic headwinds in the UK, U.S. and Asia. 

Accor SA advanced 1.4% to €31.98 after the French hospitality group launched a €400 million stock repurchase plan. 

LVMH dropped 6.0% to €689.90 after the French luxury goods maker reported lower sales growth in the third quarter, prompting worries of an end of the post-pandemic luxury boom. 

Luxury peers Kering SA and Hermes International declined 1.5%.