European Market Indexes Meandered, Euro Area Retail Sales Declined Third Consecutive Month

Bridgette Randall
08 Nov, 2023
New York City

European markets trended lower in cautious trading, and bond yields declined for the second week in a row.

Benchmark indexes in Frankfurt, London, and Paris fell after investors reassessed the economic outlook and future rate path.

The latest retail sales data suggests consumers are still challenged amid elevated food and energy prices and rising interest rates.

 

Euro Area Retail Sales Declined for Third Consecutive Month

Retail sales in the Euro Area decreased by 0.3% in September from the previous month and dropped by 2.9% from a year ago, Eurostat reported Wednesday.

The volume of retail trade declined by 1.9% for non-food products and by 0.9% for automotive fuels, while food, drink, and tobacco sales rose by 1.4%.

Among the largest economies in the currency union, retail sales declined by 0.8% and fell for the fourth consecutive month in a row in Germany, decreased by 0.4% in Italy, and edged lower by 0.8% in the Netherlands.

However, sales in France rose by 0.4%, and sales in Spain edged up by 0.2%.

 

Europe Indexes and Yields

The DAX index decreased 0.4% to 15,099.82, the CAC-40 index fell 0.2% to 6,974.08, and the FTSE 100 index declined 0.2% to 7,399.50.

The yield on 10-year German bonds decreased to 2.64%, French bonds traded lower to 3.23%, the UK gilts edged down to 4.26%, and Italian bonds inched higher to 4.54%.

The euro rebounded to $1.066, the British pound at $1.22, and the U.S. dollar at 90.20 Swiss cents.

Brent crude decreased $0.42 to $81.14 a barrel, and the Dutch TTF natural gas edged higher by €0.67 to €45.43 per MWh.

 

Europe Stock Movers

Credit Agricole SA increased 1.8% to €11.79 after the French bank reported better-than-expected earnings in the third quarter.

Continental AG jumped 2.2% to €63.14 after the company reported slightly higher earnings in the latest quarter.

Consolidated sales in the third quarter declined 1.5% to €10.2 billion from €10.4 billion, but net income increased to €299 million from a loss of €211 million.

The company tightened its consolidated annual sales outlook to between €41.0 billion and €43.0 billion, up from the previous range of between €41.5 billion and €44.5 billion.

The company also slightly raised its adjusted operating earnings margin outlook to between 12.5% and 13.5% from the previous range of between 12% and 13%.

Commerzbank AG declined 3% to €10.08, despite the German bank reporting profit in the third quarter that more than tripled.

ITV plc decreased 5.6% to 61.92 pence after the British television network operator reported flat revenue.

Serco Group plc gained 1.3% to 146.0 pence after the company won a £200 million monitoring service contract for the Ministry of Justice.

Marks & Spencer Group plc soared 10.6% to 249.17 pence after the retailer reported a jump in profit in the fiscal first half.

Revenue in the first half jumped 10.8% to £6.1 billion from £5.5 billion in the corresponding period a year ago.

Statutory profit in the first half jumped to £325.6 million from £208.5 million, and basic earnings per share increased to 10.6 pence from 8.5 pence a year ago.

ABN AMRO Bank dropped 9.5% to €11.91 after the Dutch bank reported weaker-than-expected net interest income in the third quarter because of deposit migration to higher-yielding products.

Net income in the quarter increased to €759 million from €743 million, and earnings per share rose to 85 cents from 80 cents a year ago.

Net interest income increased 20% from a year ago to €1.5 billion but fell from the previous quarter because of deposit migration and lower results in trading activities.