European Stock Indexes Extended Weekly Losses, Eurozone Trade Balance Swung to Surplus

Bridgette Randall
16 Jul, 2024
London

European markets extended losses this week as investors reviewed the latest batch of corporate quarterly results. 

Benchmark indexes in Paris, London, and Frankfurt declined amid rate-part uncertainty, valuation worry, and a weakening macroeconomic backdrop. 

Despite the domestic economic weakness, exports continue to remain a bright spot in the eurozone. 

The international trade balance swung to a surplus of Є13.9 billion in May from a deficit of Є0.4 billion in the corresponding month a year ago, Eurostat reported Tuesday. 

Exports eased 0.5% to Є241.5 billion, and imports dropped 6.4% to Є227.6 billion. 

Among leading trade partners, exports to the U.S. rose 6.8% to Є44 billion, but shipments to China decreased 5.3% to Є18.1 billion, to Switzerland fell 4.3% to Є16.3 billion, and to the UK decreased 0.5% to Є28.4 billion. 

Italy's exports in May decreased by 1.7% to Є56.2 billion and imports slumped by 5% to Є49.7 billion, according to the latest data released by the statistical agency, ISTAT, on Tuesday. 

The trade surplus in May expanded to Є6.4 billion from Є4.8 in the corresponding month a year ago. 

Italy's trade surplus has been expanding in the last several months after the import price of commodities eased following Russia's invasion of Ukraine. 

 

Europe Indexes and Yields

The DAX index decreased by 0.4% to 18,676.88; the CAC-40 index fell by 0.7% to 7,673.76; and the FTSE 100 index rose by 0.4% to 8,224.75. 

The yield on 10-year German bonds edged lower to 2.49%. French bonds inched lower to 3.15%; the UK gilts inched lower to 4.11%; and Italian bonds decreased to 3.77%.

The euro edged lower to $1.09; the British pound inched higher to $1.29; and the U.S. dollar weakened to 89.36 Swiss cents.

Brent crude decreased $0.14 to $84.89 a barrel, and the Dutch TTF natural gas rose by €0.39 to €31.18 per MWh.

 

Europe Stock Movers

Hugo Boss decreased 8.4% to €37.0, and the German fashion company lowered its annual revenue outlook, citing a China-led slowdown. 

The apparel retailer lowered its full-year revenue outlook to 4.35 billion from the previous estimate of 4.45 billion. 

The company said second-quarter revenue declined 1% to $1.02 billion, driven by a fall in sales in Asia and Europe. 

Richemont increased 0.6% to CHF 137.90, and the parent company of Cartier and Mont Blanc reported a marginal increase in sales in the fiscal first quarter ending in June. 

Sales in constant currency rose 1% but declined 1% in nominal terms to Є5.27 billion from Є5.32 billion a year earlier. 

Challenging macroeconomic conditions slowed down the growth from 19% to 14% in the corresponding period a year ago. 

Sales in Japan surged 59%, in Europe advanced 5%, in the Americas gained 10%, but plunged 27% in Greater China. 

SCOR SE dropped 25.4% to €19.43 after the French insurance company said its L&H insurance service unit would deliver a loss of €0.4 billion in the second quarter. 

Rio Tinto declined 5.4% to 5,013.0 pence after the iron ore mining company reported second-quarter shipments falling short of estimates. 

Glencore, Anglo American, and Antofagasta declined between 1% and 2% after copper prices eased for the second day in a row after China reported mixed economic data on Monday. 

Ocado jumped 9.8% to 373.90 pence after the online retailer raised the profit outlook for its technology unit. 

B&M European Value Retail SA increased 4.4% to 466.40 pence after the discount retailer reported a 2.4% increase in sales in the first quarter and signaled a positive outlook for the full year.