Rate Anxieties Keep European Markets Volatile, Manufacturing Sector Woes Deepened In April

Bridgette Randall
02 May, 2024
Frankfurt

European markets traded sideways as investors debated future interest rate paths and the manufacturing sector outlook. 

Benchmark indexes in Frankfurt and Paris edged lower after the U.S. Federal Reserve held steady its benchmark interest rate range between 5.25% and 5.50%. 

Investors debated the spillover effect of the higher-for-longer U.S. interest rates on the currency union's rate path. 

The European Central Bank has signaled that it is ready to cut its interest rates as early as June, but the central bank has not clarified the size of or the number of subsequent cuts in the year. 

Market sentiment was further dented after an ongoing downturn in the manufacturing sector deepened in April. 

HCOB Eurozone Manufacturing PMI declined to 45.7 in April from 46.1 in March, S&P Global reported in its final reading on Thursday. 

Any reading below the 50-mark indicates contraction, and any reading above the 50-mark shows expansion. 

Market indexes in London traded higher after strong earnings from Standard & Chartered and Shell PLC lifted market sentiment. 

 

Europe Indexes and Yields

The DAX index decreased by 0.1% to 17,912.18; the CAC-40 index fell by 0.9% to 7,909.23; and the FTSE 100 index inched higher by 0.4% to 8,150.63. 

The yield on 10-year German bonds edged up to 2.55%; French bonds inched lower to 3.04%; the UK gilts edged lower to 4.31%; and Italian bonds inched higher to 3.87%.

The euro edged higher to $1.069; the British pound inched higher to $1.251; and the U.S. dollar edged higher to 91.25 Swiss cents.

Brent crude increased $0.65 to $84.09 a barrel, and the Dutch TTF natural gas fell by €1.25 to €30.11 per MWh.

 

Europe Stock Movers

Shell PLC gained 1% to 2,847.51 pence after the oil giant reported better-than-expected first-quarter earnings and announced a $3.5 billion stock repurchase plan. 

Standard Chartered increased 5.4% to 732.60 pence after the financial services provider reported stronger-than-expected first-quarter profit amid elevated interest rates and higher demand for its wealth management services. 

Smurfit Kappa Group advanced 4.5% to 3,638.0 pence after the packaging material maker reported first-quarter revenue of €2.7 billion. 

Hugo Boss declined 9.4% to €45.77 after the German fashion retailer reported better-than-expected first-quarter earnings and projected revenue growth in the current year. 

Teleperformance increased 8.2% to €92.50 after the French business service provider said first-quarter revenue rose 26.7%, driven largely by the integration of the Dutch rival Majorel last year. 

Novo Nordisk decreased 2.5% to DKK 875.60 despite the Danish pharmaceutical company reporting better-than-expected first-quarter earnings. 

Vestas Wind System declined 3.2% to DKK 180.85 after the Danish wind turbine maker reported a surprise loss in the first quarter.