3-Day European Market Rally Extends Weekly Gains

Bridgette Randall
12 Jul, 2024
London

European markets extended gains for the third session in a row as investors prepare for a flood of earnings next week. 

Benchmark indexes in London and Frankfurt are set to extend weekly gains, while those in Paris trim weekly losses. 

The euro was in focus for the second week in a row, and investors debated the growing division among political parties and the shape of the next coalition government. 

The odds are rising that French President Emmanuel Macron may be forced to appoint a technocrat leader as the next prime minister after parities of various ideologies show no sign of compromise. 

French business leaders are also worried that the rise of far-left parties could alter the government's spending priorities and programs that are business-unfriendly. 

On the economic front, Germany's wholesale prices declined for the 14th month in a row, but the decline was the smallest in the latest series, the Federal Statistical Office, or Destatis, reported Friday. 

Producer price index decreased 0.6% from a year ago in June, after falling 0.7% in the previous month. 

On a monthly basis, producer prices unexpectedly declined by 0.3% in June, the first fall in four months after rising by 0.1% in May. 

 

Europe Indexes and Yields

The DAX index increased by 0.4% to 18,604.44; the CAC-40 index rose by 0.7% to 7,683.84; and the FTSE 100 index rose by 0.2% to 8,242.84. 

The yield on 10-year German bonds edged lower to 2.51%. French bonds inched lower to 3.17%; the UK gilts inched lower to 4.14%; and Italian bonds decreased to 3.81%.

The euro edged lower to $1.08; the British pound inched higher to $1.29; and the U.S. dollar weakened to 89.58 Swiss cents.

Brent crude increased $0.52 to $85.91 a barrel, and the Dutch TTF natural gas rose by €0.24 to €31.32 per MWh.

 

Europe Stock Movers

L M Ericsson Class B increased 2.4% to SEK 69.60, and the telecom equipment maker reported operating earnings in the second quarter exceeded market expectations. 

Aker Solutions ASA jumped 16.1% to €4.18, and the Norwegian maker of products for renewable energy projects reported better-than-expected second-quarter earnings. 

Ashmore Group decreased 1.4% to 177.59 pence after the company said the asset under management declined by $2.4 billion over the quarter ending in June. 

Lifco AB increased 8.2% to SEK 321.80 after the diversified business company reported better-than-expected first-half results. 

Revenue increased 4.6% to SEK 12.7 billion, net income fell 2.9% to SEK 1.6 billion, and earnings per share eased to SEK 2.50 from SEK 2.60 a year earlier. 

Revenue in the second quarter ending in June increased 8.4% to SEK 6.7 billion, and net income rose 5% to SEK 914 million.