European Markets Extend Weekly Gains as Indexes Inched In Record Territory

Bridgette Randall
15 Mar, 2024
Frankfurt

European market indexes advanced and extended weekly gains as investors looked beyond rate uncertainties and shifted their focus to corporate announcements. 

Benchmark indexes in Frankfurt advanced for the eighth week in a row, and in Paris, the CAC-40 index traded near record highs as investors pared expectations of the U.S. rate cut in June. 

Investors were hoping that the European Central Bank may follow the U.S. Federal Reserve in lowering its key lending rates, but those expectations were put on hold after the U.S. wholesale inflation accelerated in February. 

Moreover, global energy prices rebounded in March from the previous month, stoking worries about inflation staying above the central bank's target rate.

In other economic news, France's consumer price inflation eased at a slower than previously anticipated pace of 3.0% in February, the statistical agency INSEE reported Friday. 

The preliminary estimate showed inflation eased to 2.9% from 3.1% in December; however, inflation in February dropped to the lowest level since December 2021. 

Investors are also looking forward to monetary policy announcements next week from the central banks of the U.S., U.K., and Japan. 

Investors are hoping that the Bank of Japan may announce its timetable to end its negative interest rate policy following the recent pick-up in inflation and solid wage hike announcements. 

Japanese corporations agreed to wage increase requests of 5% from labor unions, the largest increase in more than three decades, amid worker shortages and stable demand for Japanese products in overseas markets. 

 

Europe Indexes and Yields

The DAX index increased by 0.3% to 17,991.01, the CAC-40 index rose by 0.3% to 8,188.55, and the FTSE 100 index inched higher by 0.102% to 7,745.08.

For the week, the DAX index gained 1.7%, the CAC-40 index advanced 2.4%, and the FTSE 100 index inched up 1.3%. 

The yield on 10-year German bonds edged up to 2.43%; French bonds inched higher to 2.87%; the UK gilts edged higher to 4.13%; and Italian bonds inched lower to 3.69%.

The euro edged higher to $1.08, the British pound inched higher to $1.275, and the U.S. dollar held steady at 88.35 Swiss cents.

Brent crude increased $0.63 to $84.75 a barrel, and the Dutch TTF natural gas advanced by €0.28 to €26.62 per MWh.

 

Europe Stock Movers

Vodafone Group jumped 4.2% to 68.81 pence after the UK-based multinational telecom company agreed to sell Vodafone Italy to Swisscom for an enterprise value of €8 billion. 

Berkeley Group PLC gained 0.2% to 4,686.0 pence after the UK-based home builder reiterated its annual pre-tax profit outlook. 

Scottish Mortgage Investment Trust jumped 3.2% to 806.75 pence after the company's board approved the stock buyback program of £1 billion over the next two years. 

Bodycote PLC jumped 4.8% to 661.50 pence after the thermal processing company reported an increase in profit and launched a £60 million stock repurchase plan. 

Salzgitter AG decreased 1.9% to €23.30 after the German specialty steel company reported a decline in its annual profit because of lower steel prices and challenging macroeconomic conditions. 

HelloFresh soared 10.2% to €7.43 after the meal-kit delivery company reported a less-than-expected 6.6% decline in its active customer base in the fourth quarter. 

Last week, the company issued its second profit warning in six months. 

Vonovia SE declined 6.2% to €25.15 after the German real estate company reported a record annual loss in 2023.