European Markets Lacked Direction, EU Vehicle Sales Advanced In October

Bridgette Randall
21 Nov, 2023
Frankfurt

European markets traded mixed, and the euro hovered near the three-month high.

Benchmark indexes in Frankfurt, Paris, and London traded sideways ahead of comments from several European Central Bank officials and the release of minutes of the November meeting by the U.S. Federal Reserve.

Positive market sentiment over the last two weeks drove market indexes higher after interest rate hike worries receded, and the stable interest rate outlook also supported market enthusiasm.

Investors also welcomed the increase in vehicle sales in October, suggesting resilient consumer spending.

 

EU Passenger Vehicle Sales Expanded Fifteenth Consecutive Month

Vehicle sales in the European Union continued to expand as buyers returned to purchase electric vehicles and producers faced a few supply chain issues, the European Automobile Manufacturers Association reported today.

New vehicle sales rose for the fifteenth month in a row.

Passenger vehicle sales in October jumped 14.6% from a year ago to 855,484 units, and the market share of fully electric vehicles increased to 14.2% from 12% in the previous month.

Battery-powered electric vehicle sales for the ten months to October jumped to 14%, surpassing diesel vehicles for the first time.

Three of the four largest vehicle markets in the European Union posted double-digit gains.

Vehicle registration in France rose 21.9%, Italy gained 20%, and Spain advanced 18.1%.

 

UK Public Sector Borrowing Expands

The UK's public sector net borrowing, excluding banks, increased to £14.9 billion, compared to £10.5 billion a year ago, the Office for National Statistics reported Tuesday.

The net borrowing in October was the second largest in the month since record-keeping began in 1993.

The UK government's total spending increased 7.7% to £99.8 because higher family benefits offset the ending of energy subsidies.

In addition, the government's revenue increased by 3.3% to £85.2 billion, driven by a £2.7 billion increase in central government tax revenue.

Despite the increase in net borrowings in the last three months in a row, borrowing between April and October totaled £98.3 billion, £17 billion less than estimated by the Office for Budget Responsibility.

 

Europe Indexes and Yields

The DAX index increased 0.1% to 15,915.55, the CAC-40 index fell 0.3% to 7,226.51, and the FTSE 100 index fell 0.5% to 7,461.70.

The yield on 10-year German bonds increased to 2.592%; French bonds traded lower to 3.152%; the UK gilts increased to 4.11%; and Italian bonds inched lower to 4.32%.

The euro continued to rebound and approached the high last seen in late August after the U.S. rate hike worries receded.

The euro rebounded to $1.094, the British pound at $1.253, and the U.S. dollar at 88.38 Swiss cents.

Brent crude decreased $0.43 to $81.91 a barrel, and the Dutch TTF natural gas edged lower by €0.38 to €45.44 per MWh.

 

Europe Stock Movers

Sonova Holding AG increased 7.5% to CHF 251.40 despite the Swiss hearing aid maker lowering its annual core profit forecast.

CRH PLC increased 1.8% to 4,827.0 pence after the building materials solution provider agreed to acquire a cement plant and 20 ready concrete mix plants in Texas from Martin Marietta Materials, Inc. for $2.1 billion.

International Consolidated Airlines Group decreased 2.4% to 159.85 pence, despite the parent company of British Air reaffirming its annual outlook.

Cranswick plc increased 1.5% to 3,700.0 pence after the meat producer estimated its annual profit near the upper end of the estimated range by analysts.

Rheinmetall AG jumped 4% to €292.80 after the German defense contractor released its mid-term strategy.

Banca Monte dei Paschi di Siena SpA dropped 8.5% to €2.81 after the Italian government sold its 25% stake in the bailed-out bank.