Europe's Stock Indexes at Six-week Low, Germany's Producer Price Deflation Extends to Ninth Month

Bridgette Randall
19 Apr, 2024
Frankfurt

Investors sought safety in precious metals, government bonds, and large-cap stocks after news reports confirmed Israeli airstrikes deep into Iran's territory. 

Benchmark indexes in Frankfurt, Paris, and London traded down on the final day of the week amid rapidly escalating tensions between Iran and Israel. 

Benchmark indexes are set to decline between 1% and 2% in Europe, extending losses for the third week in a row in Paris and Frankfurt. 

Crude oil surged as much as 4% after the news of Israel's airstrikes broke, but prices cooled on reports suggesting that diplomats in Oman, Switzerland, France, and the U.S. are looking for ways to avoid the situation deteriorating further. 

Tensions between Israel and Iran have been simmering for the last six months in parallel to the war between Israel and Hamas. 

 

Germany's Producer Price Deflation Extends to the Ninth Month

On the economic front, Germany's producer price index declined 2.9% from a year ago in March, following a decline of 4.1% in the previous month, the Federal Statistical Office reported Friday. 

The overall cost of energy prices fell by 7%, driving down producer prices in the month, with natural gas prices falling 15.4% and electricity prices by 12.6%. 

Producer prices have been falling for the ninth month in a row, but they fell at the slowest pace since July 2023. 

 

UK Retail Sales Held Steady In March 

The UK's retail sales volume was unchanged in March from the previous month but rose 0.8% from a year ago, the Office for National Statistics reported on Friday. 

Retail sales in February were revised to an increase of 0.1% from the previous month.  

The increase in sales of automotive fuel by 3.2% and non-food stores by 0.5% was offset by declines of 0.7% in food stores and 1.5% in non-store retailers. 

Retail sales rose 1.9% in the quarter ending in March when compared to the previous quarter ending in December. 

 

Europe Indexes and Yields

The DAX index decreased by 0.6% to 17,720.0; the CAC-40 index fell by 0.3% to 7,998.50; and the FTSE 100 index inched lower by 0.6% to 7,831.73.

The yield on 10-year German bonds edged up to 2.45%; French bonds inched lower to 2.97%; the UK gilts edged higher to 4.24%; and Italian bonds inched lower to 3.84%.

The euro edged higher to $1.064; the British pound inched higher to $1.246; and the U.S. dollar edged higher to 90.68 Swiss cents.

Brent crude decreased $0.49 to $86.61 a barrel, and the Dutch TTF natural gas fell by €0.59 to €31.51 per MWh.

 

Europe Stock Movers

Sodexo increased 4.1% to €80.40 after the company reported a net loss in the first half, driven by the weakness in discontinued operations. 

The company also confirmed organic revenue growth in 2024 will be near its previously estimated range of between 6% and 8%. 

Schneider Electric SA decreased 2.7% to €209.90 after the digital automation and energy management company confirmed that it is in preliminary purchase talks with the U.S.-based software company Bentley Systems Inc. 

Man Group declined 5% to 255.0 pence after the UK-based investment management company confirmed a net fund outflow of $1.6 billion in the first quarter. 

888 Holdings increased 2.0% to 81.36 pence after the online gambling company reiterated its full-year outlook. 

L'Oreal jumped 4.1% to €441.0 after the French cosmetic company reported a 9.4% increase in comparable sales in the first quarter.