Eurozone Private Sector Activity Growth Improves, FTSE 100 Index Touches New Record High

Bridgette Randall
23 Apr, 2024
Frankfurt

European markets advanced after geopolitical tensions eased, crude oil prices continued to drift lower, and there was growing optimism about corporate earnings. 

Benchmark indexes in Frankfurt and Paris rebounded, and the key index in the UK rose to a new record high in hopes of improving corporate results. 

 

Eurozone Private Sector Activity Growth Picks Up

On the economic front, the eurozone business activity growth outlook improved for the fourth month in a row, and activities expanded for the second consecutive month. 

The HCOB Eurozone Composite PMI increased to 51.4 in April from 50.3 in March, the fastest increase since March 2023, S&P Global noted in its preliminary estimate on Tuesday. 

Manufacturing output continued to contract, but at the slowest pace in a year, and service sector output expanded at the fastest pace in 11 months. 

Among the leading economies of the currency union, business activities in Germany returned to growth after contracting for nine months in a row, and output declined at the slowest pace in 11 months in France. 

 

UK Service Growth Offsets Manufacturing Downturn 

Elsewhere in the region, the UK's composite purchasing manager's index rose to an 11-month high in April to 54.0 from 52.8, S&P Global reported Tuesday. 

The preliminary business activity estimates are likely to be revised after the second assessment. 

The flash manufacturing PMI fell to 48.7 in April from 50.3 in the previous month, reflecting lower customer demand and inventory destocking. 

The flash service PMI rose to 54.9 in April from 53.1 in the previous month, indicating a sustained increase in activities in the sector driven by rising demand. 

The business activity growth results are based on a survey conducted among 650 manufacturers and 650 service providers between April 11 and 19.

 

Europe Indexes and Yields

The DAX index increased by 0.7% to 17,985.75; the CAC-40 index rose by 0.3% to 8,065.63; and the FTSE 100 index inched higher by 0.3% to a new intraday record of 8,050.04.

The yield on 10-year German bonds edged down to 2.48%; French bonds inched lower to 2.97%; the UK gilts edged lower to 4.21%; and Italian bonds inched higher to 3.79%.

The euro edged higher to $1.066; the British pound inched higher to $1.236; and the U.S. dollar edged higher to 91.16 Swiss cents.

Brent crude increased $0.09 to $87.09 a barrel, and the Dutch TTF natural gas rose by €0.44 to €29.59 per MWh.

 

Europe Stock Movers

SAP AG increased 4.4% to €173.10 after the German software and cloud services provider reaffirmed its 2024 outlook and said cloud services revenue rose 24% to €3.93 billion. 

JD Sports Fashion PLC rose 5.4% to 125.20 pence after the company proposed to acquire the U.S.-based Hibbett for $1.08 billion. 

Anglo American declined 1.9% to 2,119.0 pence after the mining company lowered its diamond production outlook. 

Kuehne & Nagle declined 2.8% to CHF 247.30 after the Swiss logistics company reported first-quarter earnings declined 40%. 

Novartis AG rose 4.4% to CHF 91.18 after the Swiss drugmaker raised its full-year outlook. 

Renault SA decreased 0.7% to €47.11 after the French automaker reported a slight increase in revenue in the first quarter. 

Associated British Foods plc soared 9.3% to 2,737.89 pence after the diversified conglomerate said first-half profit increased by 39%. 

The increase in profit was driven by the strength of the sugar and retail businesses at Primark. 

Taylor Wimpey rose 0.9% to 133.30 pence after the homebuilder reaffirmed its 2024 outlook, easing worries that higher interest rates may negatively impact sales.