European Markets Trade Near Record Highs; Bond Yields Edged Lower and Euro Edged Higher

Bridgette Randall
16 May, 2024
Frankfurt

Stock market indexes in Europe turned lower after reaching new highs in the previous session, and investors shifted their focus to the latest batch of corporate results. 

Market indexes in London, Paris, and Frankfurt traded at new highs in the previous session in the hopes that the Bank of England and the European Central Bank are still on track to start cutting rates as early as June. 

The rate-cut expectations gained further momentum after U.S. core inflation in April eased to a three-year low of 3.4%, stoking speculation that the Federal Reserve may have more room to cut interest rates in the second half. 

In commodities trading, Brent crude dropped to a six-week low and copper traded at a three-year high in the hopes of rising demand fueled by the building of new data centers. 

 

Europe Indexes and Yields

The DAX index decreased by 0.3% to 18,815.31; the CAC-40 index fell by 0.6% to 8,190.17; and the FTSE 100 index inched lower by 0.3% to 8,422.45. 

The yield on 10-year German bonds edged down to 2.42%; French bonds inched lower to 2.92%; the UK gilts edged lower to 4.07%; and Italian bonds inched lower to 3.72%.

The euro edged higher to $1.087; the British pound inched higher to $1.267; and the U.S. dollar eased to 90.21 Swiss cents.

Brent crude increased $0.30 to $82.44 a barrel, and the Dutch TTF natural gas rose by €0.63 to €30.11 per MWh.

 

Europe Stock Movers

Deutsche Telekom declined by 0.2% to €21.99 after the German telecommunication network operator reported a sharp decline in earnings. 

Net income in the first quarter plunged 87.1% to €1.98 billion from €15.36 billion. 

Siemens fell by 5.4% to €177.44 after the industrial equipment company reported a decline in earnings in its fiscal second quarter amid weak demand in its automation business. 

Sage Group PLC dropped 9.4% to 1,089.62 pence, despite the U.K.-based software company reporting robust first-half results. 

Future plc rose 11.9% to 973.41 pence after the publishing company announced a £45 million stock buyback plan. 

The company said revenue in the first half declined 3% to £391.5 million from £404.7 million, pre-tax profit dropped to £46.6 million from £66.4 million, and earnings per share fell 38% to 29 pence from 46.7 pence a year ago. 

In the period, the company returned £35.9 million to shareholders, including £32 million through the completed £45 million stock repurchase program and £3.9 million in dividends. 

BT Group jumped 11.6% to 126.25 pence after the new chief executive announced plans to more than double free cash flow over the next five years. 

EasyJet declined 4.0% to 510.68 pence after the deep discount airline reported a larger-than-expected first-half loss of £350 million. 

Aegon NV jumped 0.7% to €6.27 after the Dutch insurance company announced a stock repurchase plan. 

Eni SpA decreased by 2.4% to €14.75 after the Italian Economy Ministry announced its plans to sell a 2.8% stake in the company to raise about €1.4 billion. 

Swiss Re increased 3.4% to CHF 107.30 after the Swiss reinsurance company reported positive first quarter results. 

Zurich Insurance Group advanced 1.9% to CHF 462.10 after the company reported better-than-expected first-quarter results.