European Market Indexes Swing Around Flatline Ahead of Elections In the UK and France

Bridgette Randall
27 Jun, 2024
Frankfurt

Market indexes across Europe were little changed as investors looked ahead to the first round of elections this weekend in France. 

Benchmark indexes in Paris, London, and Frankfurt lacked direction, and bond yields edged higher amid election uncertainties in France and the UK. 

Investors are bracing for shifting economic priorities that could further delay France meeting its budget deficit target if far-right parties win a larger share of parliamentary seats. 

In the UK, the Conservative Party is also likely to lose its grip on power as voters prefer to hand over the reign of power to the Labour Party, which could further increase the nation's pile of debt. 

The Riksbank held its key lending rate at 3.75%, said inflation is nearing the 2% target rate, and added that if inflation expectations do not change, rates may be cut two to three times in the second half of the year. 

On the economic front, Spain's retail sales growth slowed to 0.2% in May from 0.3% in April, the National Statistics Institute reported Thursday. 

 

Europe Indexes and Yields

The DAX index increased by 0.1% to 18,172.23; the CAC-40 index fell by 0.5% to 7,573.19; and the FTSE 100 index rose by 0.3% to 8,202.72. 

The yield on 10-year German bonds edged higher to 2.46%; French bonds inched higher to 3.19%; the UK gilts edged higher to 4.16%; and Italian bonds increased to 4.03%.

The euro edged lower to $1.07; the British pound inched lower to $1.265; and the U.S. dollar advanced to 89.70 Swiss cents.

Brent crude increased $0.33 to $85.59 a barrel, and the Dutch TTF natural gas rose by €0.35 to €34.34 per MWh.

 

Europe Stock Movers

H & M Hennes & Mauritz AB dropped 12.5% to SEK70.15 after the Swedish retailer reported a smaller-than-expected increase in second quarter net income. 

Nordex SE declined 1.4% to €11.84, and the German wind turbine maker said it plans to restart its production in Iowa, United States. 

China-linked stocks turned lower after Chinese industrial profit growth in May slowed to 0.7%, a sharp slowdown from the annual pace of 4% in the previous month. 

Mining companies in the UK and French luxury stocks turned lower after the release of the Chinese data. 

Anglo American, Antofagasta, and Glencore declined by around 1%. 

Hermes International fell 1% to €2,188; LVMH declined 1.1% to €719.20; and Kering SA rose 3.8% to €338.75. 

Watches of Switzerland Group PLC rose 9.3% to 436.80 pence after the UK-based retailer estimated stable market conditions after the sharp decline in business following the COVID-19 pandemic slump.