European Markets Extend Weekly Gains and Bond Yields Edged Higher

Bridgette Randall
04 Jul, 2024
London

European market indexes advanced for the second day in a row as voting began across polling stations in the U.K. 

Benchmark indexes in London and Paris jumped nearly 1%, and preliminary polls suggest a dramatic shakeup in British politics. 

The Labour Party is expected to win a historic majority between 429 and 484 seats, and the Conservative Party is likely to struggle to win even 65 seats. 

After 14 years of ruling, the Conservative Party is likely to shrink to a minority party on the British political scene, which could see a change in policy at several levels, including immigration and government spending priorities. 

On the economic front, Switzerland's consumer price inflation slowed to 1.3% in June from 1.4% in May, the Swiss Federal Statistics Office reported Thursday. 

Core inflation, which excludes unprocessed food and energy, decreased to 1.1% in the month from 1.2% in the previous month. 

Seasonally adjusted factory orders in Germany in May dropped 8.6% from a year ago and 1.6% from the previous month, Destatis reported Thursday. 

On a monthly basis, orders declined for the fifth month in a row. 

New orders for April were revised to a decrease of 0.6% from the previous month and a decline of 1.8% from the same month a year ago. 

Large orders, which include orders for ships, trains, and planes, dropped 19.2% from the previous month, offset by an 11.2% increase in orders for data processing, electronic, and optical equipment. 

 

Europe Indexes and Yields

The DAX index increased by 0.3% to 18,437.71; the CAC-40 index rose by 0.8% to 7,692.10; and the FTSE 100 index rose by 0.9% to 8,244.87. 

The yield on 10-year German bonds edged lower to 2.57%; French bonds inched lower to 3.22%; the UK gilts inched lower to 4.20%; and Italian bonds decreased to 4.0%.

The euro edged lower to $1.08; the British pound inched higher to $1.28; and the U.S. dollar weakened to 90.23 Swiss cents.

Brent crude increased $0.14 to $86.37 a barrel, and the Dutch TTF natural gas fell by €0.17 to €32.14 per MWh.

 

Europe Stock Movers

French banks were in focus ahead of the French government bond sale. 

Credit Agricole jumped 2.8% to €13.63, Societe Generale gained 2.8% to €23.59, and BNP Paribas advanced 2.5% to €64.29. 

Barclays PLC increased 2.3% to 224.32 pence, and the UK-based bank said it agreed to sell its German consumer finance business to Austria-based BAWAG. 

Spectris plc gained 1.3% to 2,886.0 pence, and the instrumentation company agreed to acquire SciAps for an initial payment of $200 million and a performance-based payment of as much as $60 million. 

Nordex SE advanced 4.4% to €12.48, and the wind turbine company said DenkerWulf placed an order for seven N149/5.X turbines. 

Smith & Nephew soared 7.3% to 1,057.50 pence after activist investor Cevian Capital disclosed a 5% stake in the medical equipment maker.