European Markets Rebounded, German and Swedish Economy Struggled In Third Quarter

Bridgette Randall
30 Oct, 2023
Frankfurt

European markets advanced after a volatile week of downward trading, and investors awaited economic data releases and another batch of corporate earnings this week.

European market indexes rebounded after investors shifted their focus to quarterly results and awaited rate decisions from the Bank of England, the U.S. Federal Reserve, and the Bank of Japan.

Investors remained focused on the latest earnings results and overlooked growing worries about a wider war in the Middle East and a slower-than-expected economic rebound in China.

The DAX index jumped more than 0.5% after the German economy contracted less than expected in the third quarter.

 

German Economy Contacted In Third Quarter

The German economy contracted by 0.1% in the third quarter, following the upwardly revised 0.1% in the second quarter, the Federal Statistics Office, or Destatis, reported Monday.

Consumer spending fell sharply as consumers battled elevated inflation and rising interest rates, but investment in equipment rose, limiting the contraction in the economy.

The seasonally adjusted GDP shrank by 0.3% from a year ago in the third quarter, after remaining unchanged in the second quarter.

The largest economy in the Euro Area has been struggling under the weight of high energy prices and rising interest rates, and the economy has stagnated for three quarters in a row.

 

Swedish Economic Growth Stalled 

In other economic news, the Swedish economy stalled in the third quarter, following a 0.8% contraction in the second quarter, Statistics Sweden reported Monday.

According to the preliminary estimate, the Swedish economy shrank 1.2% from a year ago.

 

UK Mortgage Approvals Declined In September

Net mortgage approvals in September declined to 43,328 from the revised 45,447 in August, the Bank of England reported Monday.

The mortgage approvals act as an indicator for future borrowing, and the approvals dropped to the lowest level since January.

The UK's' housing market activities have been depressed after home prices surged in the last three years and mortgage rates rose following the aggressive rate hikes by the Bank of England.

 

Europe Indexes and Yields

The DAX index increased 0.6% to 14,775.64, the CAC-40 index advanced 0.7% to 6,840.90, and the FTSE 100 index edged higher by 0.8% to 7,350.11.

The yield on 10-yetrar German bonds decreased to 2.80%, French bonds traded lower to 3.42%, the UK gilts edged up to 4.55%, and Italian bonds inched higher to 4.73%.

The euro hovered near a three-month low at $1.058, the British pound at $1.212, and the U.S. dollar at 90.28 Swiss cents.

Brent crude decreased $0.88 to $89.58 a barrel, and the Dutch TTF natural gas edged higher by €2.17 to €52.70 per MWh.

 

Europe Stock Movers

Clariant AG rose 3.3% to CHF 12.79 after the company said it plans to acquire Lucas Meyer Cosmetics from International Flavors and Fragrances for $810 million.

Ascential jumped 27% to 273.60 pence after the UK-based information and analytics firm said it plans to sell its digital commerce and consumer research unit for an enterprise value of £1.4 billion.

Glencore Plc rose 1.1% to 450 pence despite the mining company lowering its 2023 nickel production estimate.

Frasers Group edged up 1.1% to 805 pence after the company announced the sale of the Missguided brand and intellectual property rights associated with the brand.

ArcelorMittal SA decreased 4.6% to €20.09 after a fire killed 32 people at a mine in Kazakhstan controlled by the company.

Reckitt Benckiser Group Plc advanced 1.6% to 5,540 pence, and the consumer products maker launched the first tranche of its stock repurchase program.