European Markets Trim Weekly Gains, Eurozone Business Activity Growth Slowed

Bridgette Randall
21 Jun, 2024
Frankfurt

Eurozone stock market indexes turned lower after the region's business activity growth slowed. 

Benchmark indexes in Paris, London, and Frankfurt declined as much as 0.8% after the Euro Area business recovery slowed in June as the weakness in the manufacturing sector gathered momentum and service sector activity deteriorated. 

 

Eurozone and UK Business Activity Growth Slowed

The HCOB Eurozone Composite PMI declined to 50.8 in June from 52.2 in May, as reported by S&P Global. 

The latest update showed an increase in private sector activity for the fourth month in a row, but the growth slowed. 

U.K. private sector growth slowed to a seven-month low after the weakness in the service sector offset the strength in manufacturing. 

 

UK Retail Sales Growth Surpasses Expectations 

Retail sales rose 2.9% on a monthly basis in May, rebounding from an upwardly revised 1.8% fall in April, the Office for National Statistics reported Friday. 

Nonfood store sales jumped 3.5%, lifting the overall retail sales to a four-month high, and non-store retailers, which are mostly online retailers, jumped 5.9%, the largest increase since April 2022. 

On a yearly basis, retail sales jumped 1.3% in May and rose 1% in the three months to May compared to the previous 3-month period; however, they fell by 0.2% when compared to the similar period a year ago. 

 

Europe Indexes and Yields

The DAX index decreased by 0.6% to 18,142.95; the CAC-40 index fell by 0.7% to 7,620.26; and the FTSE 100 index fell by 0.8% to 8,208.33. 

For the week, the DAX index jumped 0.2%, the CAC-40 index rose 0.9%, and the FTSE 100 index advanced 1%. 

The yield on 10-year German bonds edged lower to 2.35%. French bonds inched lower to 3.08%; the UK gilts edged lower to 4.03%; and Italian bonds increased to 3.89%.

The euro edged lower to $1.063; the British pound inched higher to $1.263; and the U.S. dollar weakened to 89.23 Swiss cents.

Brent crude decreased $0.02 to $85.62 a barrel, and the Dutch TTF natural gas fell by €0.32 to €34.12 per MWh.

 

Europe Stock Movers

STMicroelectronics NV declined 2.3% to €37.55 after the Franco-Italian semiconductor company launched two stock repurchase programs for up to $1.1 billion, to be completed over the next three years. 

The first tranche of the buyback will cover the $989 million employee stock award plans, and the second tranche will cover the $111 million required to meet the convertible bond settlement obligation. 

The company plans to hold repurchased shares as treasury stock. 

The company completed the previously announced stock buyback of 24,880,267 shares on a weighted average purchase price of €38.67 per share, for a total of €962.1 million, or $1.04 billion.

Britvic rose 6.3% to 1,078.64 pence after the independent-label soft drink maker rejected a second merger offer from the Danish brewery Carlberg Group for 1,250 pence per share. 

Zealand Pharma soared 19.5% to DKK 773.0 after the Danish biotech company said a preliminary study showed a high dose of its drug lowered weight by 8.6% over 16 weeks.