Stable Rate Outlook Drives European Markets Higher, Employment Growth Picks Up

Bridgette Randall
14 Nov, 2023
Frankfurt

European markets traded higher for the second day in a row, and investors reviewed local economic news.

Benchmark stock indexes in Frankfurt, London, and Paris advanced, and bond yields held firm near the two-month low level.

European bonds lacked direction in choppy trading after investors mulled over comments from ECB President Christine Lagarde that rates are expected to remain stable for at least "the next couple of quarters."

Moreover, other policymakers, in public comments, pushed back against rate cuts at the next rate setting meeting.

In other economic news, the number of employed persons in the Euro Area increased by 0.3% to 168.7 million in the third quarter, Eurostat reported Tuesday.

The increase in number of employed people accelerated from the downwardly revised 0.1% in the second quarter.

Employment growth picked up to 1.4% on an annual basis from the 1.3% increase in the second quarter.

 

Europe Indexes and Yields

The DAX index increased 0.3% to 15,392.26, the CAC-40 index advanced 0.06% to 7,091.70, and the FTSE 100 index fell 0.2% to 7,405.97.

The yield on 10-year German bonds was unchanged at 2.70%; French bonds traded higher to 3.27%; the UK gilts held at 4.29%; and Italian bonds inched higher to 4.55%.

The euro rebounded to $1.072, the British pound at $1.231, and the U.S. dollar at 90.08 Swiss cents.

Brent crude increased $0.06 to $82.59 a barrel, and the Dutch TTF natural gas edged lower by €1.35 to €46.52 per MWh.

 

Europe Stock Movers

Glencore PLC increased 2.8% to 442.35 pence after the UK-based resource company agreed to acquire coal business owned by Teck Resources Ltd for $6.93 billion.

Informa PLC gained 5.2% to 738.79 pence after the event manager lifted its full-year outlook.

The event and textbook company said revenue in the 10-month period increased by 31.7%, raised its full-year revenue estimate to £3.15 billion from £3.05 billion, and revised its adjusted operating profit to £840 million from £790 million.

The company expanded its stock repurchase plan by £150 million to £1.15 billion through March 7, 2024.

Hill & Smith PLC increased 2% to 1,789.59 pence after the engineering services provider said revenue in the four-month period to October 31 increased 15% in constant currencies.

The company said it anticipates full-year operating earnings toward the upper end of the analyst consensus estimate between £116.0 million and £118.6 million.

Vodafone Group plc declined 3.6% to 74.62 pence after the UK-based telecom operator swung to a loss on a decline in revenue, reflecting adverse foreign exchange rates and discontinued business operations.

The results reflect the disposal of Vantage Towers, Vodafone Hungary, and Vodafone Ghana in the prior financial year.

Group revenue in the fiscal first half decreased 4.3 to €21.95 billion from €22.9 billion, and the company swung to a loss of €155 million from €1.2 billion. Basic earnings per share were a loss of 1.28 cents compared to a profit of 3.37 cents.

Net debt declined to €36.2 billion from €45.5 billion a year ago.

The company announced an interim dividend of 4.5 euro cents to shareholders on November 24.

RWE AG advanced 1.7% to €36.91 after the German utility company reported an 82% surge in core profit for the first nine months.

Delivery Hero SE increased 4.1% to €28.0 after the Germany-based online food delivery company raised its full-year outlook.