European Markets Pause 4-day Rally, Resource and Luxury Stocks In Focus

Bridgette Randall
09 May, 2024
Frankfurt

European markets rested after advancing for consecutive sessions in a row as investors digested the latest batch of corporate results and awaited the Bank of England's rate decision. 

The Bank of England is widely anticipated to hold interest rates steady for the eighth time in a row as the country battles persistent fuel and food price inflation and elevated service inflation. 

Investors are likely to focus on comments from Governor Andrew Bailey and the central bank's inflation outlook. 

Investors have been bidding up stocks in hopes that the European Central Bank is ready to announce its first rate cut decision at its next meeting, overlooking the weakness in consumer spending and weakening business sentiment. 

The euro is likely to face more selling pressure as rate paths in the U.S. and the eurozone diverge. 

Investors also reviewed the increase in China's imports in April, supporting the expectations of rising exports from the eurozone to the world's second-largest economy. 

 

Europe Indexes and Yields

The DAX index increased by 0.3% to 18,547.88; the CAC-40 index fell by 0.1% to 8,124.01; and the FTSE 100 index inched higher by 0.04% to a new intraday record of 8,357.51. 

The yield on 10-year German bonds edged down to 2.49%; French bonds inched lower to 2.99%; the UK gilts edged lower to 4.17%; and Italian bonds inched higher to 3.84%.

The euro edged higher to $1.073; the British pound inched higher to $1.249; and the U.S. dollar edged higher to 90.94 Swiss cents.

Brent crude increased $0.66 to $84.24 a barrel, and the Dutch TTF natural gas fell by €0.67 to €31.36 per MWh.

 

Europe Stock Movers

Banco de Sabadell jumped 3.5% to €1.86 after BBVA proposed a €12.2 billion hostile takeover of the company.

BBVA declined 5.8% to €9.68 after Sabadell's board rejected the company's all-cash merger offer earlier this week. 

Telefonica increased 0.1% to €4.19 after the Spanish telecom network operator reported better-than-expected quarterly results. 

Nexi increased 5.8% to €6.04 after the Italian payment processor reported better-than-expected first quarter results and launched its stock buyback program. 

China-linked luxury goods makers declined despite the second-largest economy reporting rising imports in April. 

LVMH fell 0.9% to €780.60, Hermes declined 0.8% to €2,287.0, and Kering SA dropped 0.9% to €328.20. 

ITV gained 1.6% to 75.55 pence despite the UK-based broadcasting company reporting a decline in first quarter revenue. 

BAE Systems rose 0.8% to 1,392.50 pence after the defense contractor reiterated its fiscal year 2024 outlook and delivered strong performance in the year so far. 

John Wood Group was nearly unchanged at 192.90 pence after the oil services company confirmed its outlook for fiscal years 2024 and 2025.