European Indexes Extend Weekly Losses, Eurozone Current Account Surplus Held Steady In May

Bridgette Randall
19 Jul, 2024
London

European markets declined in Friday's trading and extended weekly losses after a host of issues hobbled market sentiment. 

Benchmark indexes in Paris, London, and Frankfurt declined following the European Central Bank's decision to hold its key lending rates steady on Thursday. 

Bond traders are anticipating at least two more rate cuts of 25 basis points in September and October, in the hopes of weakening inflationary pressures. 

Investor sentiment was also dented after a global Microsoft outage knocked down computer services at several large companies, banks, and airlines. 

German producer price inflation declined 1.6% in June, the Federal Statistical Office, Destatis, reported.

Producer price deflation extended to the 12th month in a row amid falling energy prices, but the decline was the smallest in the latest sequence. 

The Eurozone current account surplus was 37 billion in May, matching the level in the previous month, the European Central Bank reported Friday. 

In May, the international goods surplus was €33 billion and the service surplus was €15 billion, after exports rose at a faster pace than imports. 

The primary income surplus was €4 billion, partly offset by a deficit for secondary income of €14 billion.

 

Europe Indexes and Yields

The DAX index increased by 0.7% to 18,236.73; the CAC-40 index fell by 0.5% to 7,552.53; and the FTSE 100 index advanced by 0.6% to 8,158.07. 

The yield on 10-year German bonds edged higher to 2.44%, French bonds inched higher to 3.10%, the UK gilts inched higher to 4.10%, and Italian bonds decreased to 3.78%.

The euro edged lower to $1.09; the British pound inched higher to $1.29; and the U.S. dollar weakened to 88.94 Swiss cents.

Brent crude decreased $0.21 to $84.89 a barrel, and the Dutch TTF natural gas fell by €0.12 to €32.21 per MWh.

 

Europe Stock Movers

SEGRO declined 0.8% to 918.0 pence after the UK-based property company agreed to sell a portfolio of four warehouses in Italy for €327 million. 

Mining companies in London declined after copper prices eased for the third day in a row. 

Chinese demand growth worries kept commodities prices on edge after the Chinese Communist Party's top policy committee ended its Third Plenum with no major economic reform announcement. 

Antofagasta, Angle American, and Glencore declined between 0.7% and 1.5%. 

Sartorious AG plunged 12.6% to €172.20 after the German pharmaceutical products maker lowered its full-year outlook. 

Electrolux AB increased 6.8% to SEK 96.54 after the Swedish appliance maker swung to a larger-than-expected profit in the second quarter. 

Danske Bank AS rose 7.6% to DKK 214.80 after the Danish bank reported a better-than-expected second-quarter profit. 

The bank also said it plans to return 5.5 billion Danish kroner to shareholders later in the year.