European Markets Trade Near Highs, Factory Activities In Spain and Italy Diverge

Bridgette Randall
01 Mar, 2024
Frankfurt

European markets advanced as investors looked beyond interest rate uncertainties, and bond yields edged lower after inflation in the eurozone eased in January. 

Benchmark indexes in Frankfurt traded at new highs and in Paris flirted near recent highs after investors reviewed the latest updates on inflation, retail sales, and the jobs market. 

Consumer price inflation in the eurozone eased to 2.5%, but core inflation moderated less than expected to 3.1%, and both measures of inflation indicated inflation is likely to take a while before it falls below the target rate set by the European Central Bank. 

Investors overlooked the stubborn inflation and shifted their focus to the latest batch of earnings results. 

Factory activities in Spain returned to expansion, but in Italy they contracted in February, according to two separate surveys released by S&P Global Friday. 

The HCOB Spain Manufacturing PMI increased to 51.5 from 49.2 in January, indicating the first month of rising activities driven by growing new orders and output. 

The HCOB Italy Manufacturing PMI inched higher to 48.7 in February from 48.5 in the previous month as the country continued to face weak demand and challenging macroeconomic conditions. 

 

Europe Indexes and Yields

The DAX index increased by 0.6% to 17,786.77, the CAC-40 index gained by 0.2% to 7,939.67, and the FTSE 100 index inched higher by 0.7% to 7,686.21.

For the week, the DAX index advanced 1.8%, the CAC 40 decreased 0.4%, and the FTSE 100 index dropped 0.5%. 

The yield on 10-year German bonds edged down to 2.45%; French bonds inched lower to 2.93%; the UK gilts edged lower to 4.16%; and Italian bonds inched lower to 3.90%.

The euro edged higher to $1.081, the British pound inched higher to $1.263, and the U.S. dollar weakened to 88.50 Swiss cents.

Brent crude decreased $1.04 to $82.96 a barrel, and the Dutch TTF natural gas increased by €0.34 to €25.20 per MWh.

 

Europe Stock Movers

Aegon NV decreased 3.9% to €5.33 after the Dutch insurance company reported a net loss of €199 million in the full year 2023. 

Rheinmetall AG added 1.7% to €430.90, and the aerospace and defense company won an additional order to supply Skynex defense systems. 

Sixt SE increased 2.9% to €89.15, and the German rental car company estimated a positive outlook for full-year revenue and earnings after reporting mixed quarterly results. 

Airbus SE gained 0.2% to €153.22 after the aerospace company announced 40 firm helicopter orders and 155 commitments at the Heli-expo 2024 held in California. 

Vallourec SA decreased 4.3% to €13.43, despite the French maker of tubular products reporting higher fourth-quarter profit than a year ago. 

ITV plc soared 14.3% to 63.90 pence after the British media company sold its 50% stake in the joint venture Britbox to its partner BBC Studios for £255 million. 

Rightmove declined 3.4% to 549.40 pence after the UK-based property listing platform estimated 2024 revenue growth between 7% and 9%.