European Markets Drop 1%, UK Inflation Accelerate In December

Bridgette Randall
17 Jan, 2024
Frankfurt

Stock market sentiment in Europe turned negative after policymakers in the region pushed back against the timing of rate cuts.

Moreover, market sentiment was weak at the opening after China's GDP in the fourth quarter expanded at a slower-than-expected pace of 5.2% in the fourth quarter.

China's GDP for 2023 also rose at the same rate of 5.2%, the slowest pace in three decades amid a protracted property crisis, weak consumer spending growth, and global uncertainties.

While China's economy is still growing at a faster rate than the economies of the eurozone and the U.S., growth has steadily declined from as high as 7% enjoyed in the 2010s.

Benchmark indexes in Frankfurt, Paris, and London declined more than 1% on the economic uncertainties and interest rate outlook.

 

UK Consumer Inflation Accelerated In December

The UK's annual inflation in December rose to 4% from 3.9% in November, the Office for National Statistics reported on Wednesday.

Inflation perked up for the first time in ten months after prices of tobacco and alcohol jumped 12.9% from 10.2%, reflecting a higher duty on tobacco, and recreation and culture inflation advanced to 5.7% from 5.2% in the previous month, respectively.

However, inflation for food and non-alcoholic beverages eased to 8% from 9.2% and for restaurants and hotels to 7% from 7.5%.

 

Europe Indexes and Yields

The DAX index decreased 1.1% to 16,397.04, the CAC-40 index fell 1.1% to 7,314.56, and the FTSE 100 index dropped 1.6% to 7,433.07.

The yield on 10-year German bonds edged up to 2.23%; French bonds inched higher to 2.76%; the UK gilts edged higher to 3.87%; and Italian bonds increased to 3.84%.

The euro edged lower to $1.087, the British pound inched lower to $1.267, and the U.S. dollar eased to 86.21 Swiss cents.

Brent crude advanced $1.67 to $76.64 a barrel, and the Dutch TTF natural gas decreased by €0.80 to €28.86 per MWh.

 

Europe Stock Movers

Just Eat Takeaway.com NV decreased 0.4% to 1,139.0 pence in a weak market after the food delivery company lifted its full-year core profit outlook.

Enel SpA declined 1.9% to €6.62 after the company launched a €1.75 billion bond offering.

Antofagasta plc declined 2.6% to 1,579.50 pence after the mining company released its annual production estimates.

Wizz Air Holdings fell 3.4% to 1,952.14 pence after the discount airline said it would pay an additional £1.2 million to customers in compensation.

Renault SA dropped 1.8% to €33.85 in a weak market, and the automaker reported a rise in global sales volume.

Luxury fashion houses with significant sales in China declined after China's economy expanded at the slowest pace in nearly three decades.

Kering SA declined 2.6% to €349.55, LVMH dropped 2% to €652.90, and Hermes International fell 1.1% to €1,805.20.

888 Holdings PLC dropped 7.4% to 75.03 pence after the international sports betting and gambling company reported weak revenue in the fourth quarter and fiscal 2023.