European Market Indexes Decline After Private Sector Growth Stalls

Bridgette Randall
24 Jul, 2024
London

European market indexes declined after business activities stagnated in the eurozone, and earnings season picked up pace. 

Benchmark indexes in Paris, London, and Frankfurt struggled to advance and lost as much as 1% amid worries of economic growth. 

The HCOB Eurozone Composite PMI eased to 50.1 in July from 50.9 in June, according to a preliminary estimate released by S&P Global. 

The index dropped to a five-month low, and the latest reading signaled near stagnation in the currency union as the fragile economic recovery continues to lose steam. 

Manufacturing sector activities contracted to 45.6 from 45.8, and the service sector slowed to 51.9 from 52.8. 

The economic backdrop was weaker in two of the largest economies in the region; business activities declined in Germany for the first time in four months, and in France, growth eased for the third consecutive month. 

 

Europe Indexes and Yields

The DAX index decreased by 0.7% to 18,432.36; the CAC-40 index declined by 1% to 7,532.58; and the FTSE 100 index fell by 0.1% to 8,162.83.

The yield on 10-year German bonds edged lower to 2.43%, French bonds inched higher to 3.12%, the UK gilts inched higher to 4.13%, and Italian bonds increased to 3.77%.

The euro edged lower to $1.08; the British pound inched higher to $1.29; and the U.S. dollar weakened to 88.53 Swiss cents.

Brent crude decreased $0.53 to $81.81 a barrel, and the Dutch TTF natural gas fell by €0.57 to €31.30 per MWh.

 

Europe Stock Movers

Informa PLC jumped 3.9% to 880.40 pence after the company agreed to acquire Ascential plc for £1.2 billion or $1.5 billion. 

Marston's PLC rose 2.9% to 39.25 pence, and the pub operator reported positive momentum for the 16-week period. 

LVMH dropped 4.4% to €663.20 after the luxury goods maker reported weaker-than-expected second quarter results, raising the prospect of a wider slowdown in the industry. 

Revenue in the first half declined 1% to €41.7 billion from €44.3 billion, and net profit declined 14% to €7.3 billion from €8.5 billion. 

Hermes declined 1.8% to €2,045.0, Kering dropped 4.4% to €301.45, and Richemont fell 1.1% to CHF 134.0. 

Remy Cointreau decreased 0.4% to €70.55 after the spirit maker reported a wider-than-expected decline in first-quarter sales of 15.6%.

Deutsche Bank dropped 6.1% to €14.72, and the German bank reported its first quarterly loss in four years.

BNP Paribas fell 1% to €64.08, despite the French financial service company reporting second-quarter earnings that surpassed market expectations.