European Stocks Halted 3-Day Slump, Euro In Focus Amid Growing Political Turmoil In France

Bridgette Randall
10 Jul, 2024
London

European markets rebounded from a three-day slump, but political uncertainty loomed in France as lawmakers struggled to form an alliance after a heated snap election. 

Benchmark indexes in Paris, London, and Frankfurt jumped as much as 0.8% as investors overlooked the brewing political malaise in France and focused on the upcoming earnings season. 

French President Emmanuel Macron, breaking tradition, allowed ministers of the recently resigned government to hold positions and conduct daily activities after a change of majority in parliament. 

With a hung parliament, France's leading position in the European Union is diminished, allowing it to influence political outcomes and nudge policies in its favor. 

In addition, political disarray in Germany is also negatively impacting sentiment for the euro. 

On the economic front, investors are also looking forward to the release of inflation data from France, Italy, and Spain this week. 

 

Europe Indexes and Yields

The DAX index increased by 0.8% to 18,373.27; the CAC-40 index rose by 0.9% to 7,574.88; and the FTSE 100 index rose by 0.6% to 8,186.21. 

The yield on 10-year German bonds edged lower to 2.51%. French bonds inched lower to 3.15%; the UK gilts inched lower to 4.10%; and Italian bonds decreased to 3.85%.

The euro edged lower to $1.08; the British pound inched higher to $1.28; and the U.S. dollar weakened to 89.80 Swiss cents.

Brent crude decreased $0.14 to $84.51 a barrel, and the Dutch TTF natural gas rose by €0.33 to €31.42 per MWh.

 

Europe Stock Movers

BMW increased 0.9% to €88.40, despite the German luxury automaker reporting weak vehicle sales in the second quarter. 

Volkswagen AG decreased 0.8% to €105.75 after the German automaker said it plans to close its facility in Brussels for Audi due to an ongoing decline in sales of electric vehicles. 

Evotec SE soared 4% to €9.76 after the company announced a collaboration with Pfizer to accelerate drug discovery efforts in France. 

Enagas gained 4.3% to €13.36 after the Spanish natural gas distribution grid operator said it agreed to sell its 30.2% stake in the Tallgrass to Blackstone for $1.1 billion. 

Enagas and Blackstone teamed up in 2019 to acquire a 10.93% initial stake in Tallgrass Energy, a US energy infrastructure company founded in 2012. 

It owns three inter-state gas pipelines regulated by the Federal Energy Regulatory Commission, with a total of 11,000 km of gas transmission pipelines, 2,400 km of gas gathering pipelines, and a 1,300 km oil pipeline.

Barratt Developments PLC declined 1.4% to 484.40 pence after the UK-based home builder said it is lowering its home sales estimate in the second half, citing elevated mortgage rates and challenging macroeconomic conditions. 

Travis Perkins jumped 6.5% to 853.0 pence after the construction materials maker appointed a new chief executive.

Travis Perkins appointed Pete Redfern as Director and Chief Executive Officer on September 16, succeeding Nick Roberts, who will resign from the office on the same day.