European Indexes Gained 1% as Investors Reacted to China Rate Cuts and U.S. Political Developments

Bridgette Randall
22 Jul, 2024
London

European market indexes rebounded in Monday's trading, and bond yields edged lower. 

Benchmark indexes in Paris, London, and Frankfurt advanced, powered by a rebound in tech stocks, mining companies, and luxury retailers. 

The People's Bank of China unexpectedly lowered its seven-day repo rate and one-year and five-year loan prime rates to record low levels. 

The central bank lowered its one-year and five-year loan prime rates by 10 basis points to 3.35% and 3.85%, respectively, to support the fragile economic recovery. 

Market sentiment was also positive after U.S. President Joe Biden dropped out of the presidential race and offered his support to Vice President Kamala Harris as a Democratic Party candidate. 

The Republican Party's candidate, Donald Trump, a convicted felon and a target of several U.S. government investigations, has been a vocal critic of the Ukraine war and has supported the ending of the war. 

Former U.S. President Trump threatened to drop out of NATO, the North Atlantic Treaty Organization, during his presidency between 2017 and 2021. 

 

Europe Indexes and Yields

The DAX index increased by 1.5% to 18,433.00; the CAC-40 index rose by 1.4% to 7,636.82; and the FTSE 100 index advanced by 0.8% to 8,222.02.

The yield on 10-year German bonds edged higher to 2.46%, French bonds inched higher to 3.12%, the UK gilts inched higher to 4.13%, and Italian bonds decreased to 3.75%.

The euro edged lower to $1.09; the British pound inched higher to $1.29; and the U.S. dollar weakened to 88.84 Swiss cents.

Brent crude decreased $0.43 to $82.18 a barrel, and the Dutch TTF natural gas fell by €0.20 to €31.20 per MWh.

 

Europe Stock Movers

Ocado PLC rose 9.4% to 415.27 pence after the U.S.-based largest independent grocery chain operator placed an order for its customer fulfillment centers.

Rentokil Initial plc jumped 9.3% to 490.50 pence on reports that former BT chief Philip plans to acquire the British pest-control company. 

Belimo Holding AG soared 15.2% to CHF 512.50 after the Swiss ventilation product company raised its sales outlook. 

Ryanair Holdings plc dropped 13.4% to €14.37 after the discount airline reported a 46% decline in its quarterly profit. 

Hammerson plc increased 3.4% to 30.14 pence after the British property company agreed to sell its entire stake in the Value Retail business for an enterprise value of £1.5 billion, generating cash flow of £600 million. 

Entain PLC increased 5.6% to 680.52 pence after the UK-based gambling firm appointed Gavin Isaacs, former chief of Scientific Games, as its new chief executive. 

Airbus SE increased by 0.9% to €133.0 after French media reports indicated that the European aerospace company has narrowed down to eight potential sites in India for the final assembly line for H125 helicopters.