Market Indexes In Germany and France Reach New Highs

Bridgette Randall
22 Feb, 2024
Frankfurt

European markets advanced in Thursday's trading as investors awaited the release of the latest policy meeting minutes later in the day. 

Benchmark indexes in Frankfurt, Paris, and London advanced, and bond yields edged higher as investors scaled back hopes of a rate in the near future. 

Market sentiment was also bolstered after a private survey of the service sector showed the smallest decline in eight months in February. 

Moreover, positive earnings from AXA, Zurich Insurance, Lloyds Banking Group, and Rolls Royce supported the advance in indexes. 

 

Eurozone Private Sector Contraction Slowed In February 

The HCOB Eurozone Composite PMI rose to 48.9 in February from 47.9 in the previous month, according to a preliminary estimate released by S&P Global.  

Overall activities declined for the ninth month in a row after the downturn in manufacturing was offset by a stable level of activity in the service sector. 

New order inflow continued to decline, but employment levels rose for the second month in a row. 

The services purchasing managers' index increased to a seven-month high of 50.0 from 48.4 in January, while the index for manufacturing eased to 46.1 from 46.6 in the previous month.

 

Europe Indexes and Yields

The DAX index increased by 1.1% to 17,310.18, the CAC-40 index rose 0.8% to 7,870.45, and the FTSE 100 index inched higher by 0.1% to 7,666.60.

The yield on 10-year German bonds edged up to 2.45%; French bonds inched higher to 2.92%; the UK gilts edged higher to 4.11%; and Italian bonds inched higher to 3.94%.

The euro edged higher to $1.085, the British pound inched higher to $1.267, and the U.S. dollar gained to 87.74 Swiss cents.

Brent crude increased $0.42 to $83.45 a barrel, and the Dutch TTF natural gas declined by €0.11 to €23.87 per MWh.

 

Europe Stock Movers

Zurich Insurance gained 3.3% to CHF 461.20 after the Swiss reinsurance company announced a stock repurchase plan. 

Nestle SA declined 4.4% to CHF 94.69 after the largest packaged food maker in the world reported weaker-than-expected organic sales growth in its latest fiscal year. 

Repsol SA increased 4.5% to €14.32 after the Spanish energy company committed to returning 4.6 billion in cash dividends to shareholders between 2024 and 2027. 

WPP PLC declined 2.7% to 759.60 pence, despite the UK-based global advertising firm reporting full-year revenue and earnings in line with market expectations. 

Accor SA increased 5.1% to €39.86 after the French hotel group reported a better-than-expected annual core profit. 

Lloyds Banking Group rose 2.2% after the UK-based bank reported a rise in its annual profit. 

AXA increased 2.8% to €32.05 after the French insurance group reported an increase in its underlying profit in the fiscal year 2023. 

The insurance company also announced a stock buyback plan. 

Rolls Royce soared 8.8% to 358.40 pence after the aviation and power engineering firm reported a sharp rise in its annual profit in fiscal year 2023 and estimated a higher profit in 2024.