European Indexes Drifted Lower and Bond Yields Eased

Bridgette Randall
07 Nov, 2023
Frankfurt

Stock market indexes in Europe traded down after China reported mixed international trade data.

Market indexes in Frankfurt, Paris, and London edged lower after China's exports declined for the sixth month in a row, but imports unexpectedly increased.

German industrial production declined for the fourth month in a row, and industrial producer prices in the eurozone declined at a record pace in September.

 

China Exports and Trade Surplus Dropped

Exports declined in October by 6.4% to $274.3 billion, and imports rose 3.0% to $218.3 billion, the General Administration of Customs reported Tuesday.

Imports rose for the first time since February, suggesting that the Chinese government's plan to stimulate the economy is having a positive impact.

Sluggish exports dragged the trade surplus in October to $56.5 billion from $77.7 billion in September.

Exports declined to the U.S. by 8.2%, Japan by 13.0%, ASEAN by 15.1%, South Korea by 17%, and the European Union by 12.6%.

 

German Industrial Production Declined for 4th Consecutive Month In September

Germany's industrial production declined for the fourth month in a row, highlighting ongoing economic weakness in the Euro Area's largest economy.

Industrial production declined 1.4% in September from the previous month, following the downwardly revised 0.1% fall in August, Destatis reported Tuesday.

On an annual basis, industrial production declined 3.7% from a year ago.

The sharp fall of 5% from the previous month in automobile production led to the decline in the month, followed by a 4.4% decline in electrical equipment and a 9.2% fall in the pharmaceutical industry, offset by a 4.1% rise in mechanical engineering.

Outside the manufacturing industry, energy production fell by 1.7% in September, and construction production was unchanged from the previous month.

 

Record Decline In Eurozone Producer Prices In September 

Industrial producer prices declined 12.4% from a year ago in the euro area in September, Eurostat reported Tuesday.

The measure of wholesale prices dropped at the fastest pace on record, driven by a 31.3% plunge in energy prices and 4.8% in intermediate goods.

Meanwhile, prices rose at a slower pace of 3.9% compared to 4.4% in August for capital goods, durable goods inflation eased to 4.3% from 4.7%, and non-durable consumer goods slowed to 5.5% from 6.6%.

Excluding energy, producer price inflation decelerated to 0.5% from a year ago in September, down from 1.0% in August.

On a monthly basis, producer prices rose by 0.5%, the second month of an increase in a row.

 

UK Home Prices Extended Sixth Month Decline In October 

UK home prices continued to fall in October as buyers struggled with elevated home prices and surging mortgage rates.

The Halifax House Price Index fell 3.2% from a year ago in October, following a revised 4.5% in September, Halifax and the Bank of Scotland reported Tuesday.

On an annual basis, home prices declined in all regions across the UK, with the Southeast leading with a fall of 6.0% and London property prices easing by 4.6%.

On a monthly basis, home prices rose 1.1%, following a decline for six months in a row due to the lack of availability of homes for sale.

 

Europe Indexes and Yields

The DAX index decreased 0.3% to 15,092.93, the CAC-40 index fell 0.5% to 6,977.85, and the FTSE 100 index fell 0.1% to 7,409.80.

The yield on 10-year German bonds decreased to 2.70%, French bonds traded lower to 3.29%, the UK gilts edged down to 4.30%, and Italian bonds inched higher to 4.52%.

The euro rebounded to $1.069, the British pound at $1.232, and the U.S. dollar at 89.99 Swiss cents.

Brent crude decreased $1.84 to $83.34 a barrel, and the Dutch TTF natural gas edged higher by €1.87 to €46.71 per MWh.

 

Europe Stock Movers

Energy and resource companies were in focus after China reported mixed international trade data and tensions in the Middle East receded.

BP plc fell 1.2% to 485.40 pence, Shell PLC dropped 1.5% to €30.79, and TotalEnergies SE eased 1.4% to €61.76.

UBS Group AG gained 3% CHF 22.54 after the Swiss banking group reported progress in trimming costs and stronger-than-expected client inflows.

Watches of Switzerland Group PLC jumped 8.2% to €6.55 after the luxury watch retailer reported improving sales in its fiscal second quarter, and the retailer set the target to double its sales and profit by fiscal year 2028.

Persimmon plc increased 4.6% to 1,132.0 pence after the UK-based home builder lifted its estimate of new home completions.

Associated British Foods plc soared 6.4% to 2,237.0 pence after the Primark owner reported a 5% increase in annual income and the food company declared a special dividend.

Engie SA increased 2.1% to €15.46 after the French energy company said operating earnings for the nine-month period rose 14.7% to €8.3 billion from €7.3 billion in the same period a year ago.

The company also revised its annual outlook.