European Stocks and Bond Yields Rebounded In Cautious Trading

Bridgette Randall
01 Nov, 2023
Frankfurt

European markets hovered near the flatline, and the euro edged lower for the second day in a row.

Market indexes across Europe were in a holding pattern, and investors reacted to another batch of earnings and bond yields traded with a downward bias.

Investors awaited interest rate decisions from the Federal Reserve later today and from the Bank of England on Thursday.

On Tuesday, Eurostat, the statistical agency of the currency union, said the consumer price index in the eurozone dropped to a two-year low, raising hopes that the European Central Bank may pause rates for an extended period.

But worries of an economic slowdown dominated market sentiment after the eurozone economy struggled to expand in the third quarter.

Moreover, worries of a wider war in the Middle East also kept crude oil and natural gas prices elevated for the third week in a row, rekindling fears of a rebound in inflation.

 

Europe Indexes and Yields

The DAX index increased 0.4% to 14,874.72, the CAC-40 index advanced 0.4% to 6,912.75, and the FTSE 100 index edged up 0.4% to 7,357.12.

The yield on 10-yetrar German bonds increased to 2.81%, French bonds traded higher to 3.41%, the UK gilts edged up to 4.54%, and Italian bonds inched higher to 4.75%.

The euro hovered near a three-month low at $1.054, the British pound at $1.214, and the U.S. dollar at 90.88 Swiss cents.

Brent crude increased $1.21 to $86.23 a barrel, and the Dutch TTF natural gas edged lower by €0.73 to €47.23 per MWh.

 

Europe Stock Movers

Wolters Kluwer NV declined 3.5% to €116.90 after the Netherlands-based trade publishing firm reported adjusted operating profit for the first nine months declined 2% in constant currencies.

Skanska AB plunged 11.5% to 148.80 Swedish kronor after the Swedish construction firm reported lower-than-expected third-quarter profit, reflecting a weak commercial real estate market.

ASOS Plc dropped 10.5% to 352.10 pence after the struggling online fashion retailer reported an annual loss of £300 million.

ASOS stock dropped to the level last seen in 2009.

The embattled fashion retailer said annual revenue declined 11% to £3.5 billion from £3.9 billion, after-tax losses expanded to £223.1 million from £30.8 million, and diluted earnings per share fell to 213 pence from 30.9 pence a year ago.

Active customers declined 9% to 23.3 million, but average transaction value increased 7% to £40.3 million from £37.6 million, and average order frequency edged lower to 3.6 from 3.8 a year ago.

The company accelerated its turnaround efforts, adjusted from pandemic boom to post-pandemic bust, and aligned its corporate structure to reflect weaker demand from repeat customers.

Premier customers declined 11%, reflecting higher subscription prices and higher thresholds for free delivery.

Aston Martin Lagonda Global Holdings PLC dropped 11% to 194.60 pence after the luxury vehicle maker reported a wider-than-expected loss in the third quarter.

The company also lowered its 2023 volume outlook for the DB12 model, but total vehicle sales in the quarter rose 4% to 1,444 from 1,384 a year ago.

Revenue increased 15% to £362.1 million from £315.5 million, and net loss shrank to £118.0 million from £228.2 million.

In the nine-month period, the wholesale average selling price across all models increased to £219,000 from £195,000 a year ago.