Eurozone Retail Sales Contracted, German Factory Orders Advanced

Bridgette Randall
06 Feb, 2024
Frankfurt

European markets hovered near recent highs, and bond yields advanced, but the euro edged lower against the U.S. dollar.

Benchmark indexes in Paris, London, and Frankfurt hovered near the flatline as investors reviewed the latest earnings results and economic update from Germany.

 

Germany Factory Orders Expanded

German factory orders rose 8.9% from the previous month and advanced 2.7% from a year ago in December, The Federal Statistics Office, or Destatis, reported Tuesday. 

 

Eurozone Retail Sales Declined

Eurozone annual retail sales declined for the fifteenth month in a row after elevated borrowing costs and high inflation weighed on demand. 

Retail sales declined 1.1% from the previous month in December and fell 0.8% from a year ago, Eurostat reported Tuesday. 

Food, drinks, and tobacco sales declined for the third month in a row and declined at a faster pace of 1.6% compared to 0.1% in November. 

Non-food products sales fell by 1.0% for the first time after rising in previous two months.  

 

China-linked Stocks In Focus 

China-linked stocks were in focus after China's sovereign wealth fund intervened and acquired exchange-traded index funds to bolster China's stocks.

On Tuesday, Central Huijin Investment, an arm of China's $1.3 trillion sovereign wealth fund, confirmed its purchase of index-based exchange-traded funds.

The sovereign wealth fund's arm also confirmed its plans to make additional purchases but did not elaborate on the amount and timing of these acquisitions.

Benchmark indexes in Shanghai and Hong Kong fell for the fourth year in a row in 2023, and the Hang Seng index dropped 9%, its second worst January decline since 2016.

 

Europe Indexes and Yields

The DAX index decreased 0.03% to 16,899.54, the CAC-40 index rose 0.3% to 7,608.93, and the FTSE 100 index inched higher by 0.4% to 7,639.81.

The yield on 10-year German bonds edged up to 2.31%; French bonds inched higher to 2.81%; the UK gilts edged higher to 4.01%; and Italian bonds inched lower to 3.87%.

The euro edged lower to $1.072, the British pound inched higher to $1.254, and the U.S. dollar gained to 87.24 Swiss cents.

Brent crude decreased $0.16 to $77.81 a barrel, and the Dutch TTF natural gas increased by €0.10 to €27.81 per MWh.

 

Europe Stock Movers

UBS Group declined 2.5% to CHF 25.07 after the Swiss bank reported its second consecutive quarterly loss in a row.

Nokia Oyj fell 1% to €3.32, and the Finnish telecom equipment maker signed a cross-licensing arrangement with China-based telecom company Vivo.

BP plc gained 5.5% to 478.01 pence after the energy explorer and distributor announced a stock repurchase plan of $1.75 billion and the company reported its second highest annual profit in a decade.

Beiersdorf AG inched up 0.3% to €140.80 after the German personal care products maker hiked its dividend and announced a stock repurchase plan.