Mixed Trading In Europe Amid Rising Tensions in the Middle East

Bridgette Randall
29 Jul, 2024
London

European markets advanced in Monday's trading as investors looked ahead to monetary policy decisions from major central banks this week. 

However, market enthusiasm was tempered amid rising tensions in the Middle East and an escalation of the war of words between Turkey and Israel. 

Israel has been under pressure from the U.S. and other leading nations in the Muslim world for not allowing the passage of humanitarian aid to Gaza and for stepping up illegal land acquisition. 

Turkey's President Recep Tayyip Erdogan is also under domestic pressure to show solidarity with Gaza, amid frequent military invasions by the Israeli army. 

Amid a busy week of earnings, investors are looking forward to quarterly results from at least 1,500 companies in the U.S. and Europe, including Amazon, Apple, Microsoft, Exxon Mobil, and P&G. 

In Europe, the eurozone, Germany, France, Spain, and Italy are set to release their GDP and inflation reports.

Euro Area inflation is expected to ease to 2.3%, but inflation in Germany is likely to hold at 2.2%.

Moreover, the Bank of England is likely to hold its key lending rates, amid rising speculation that policymakers may cut rates for the first time in four years.

In China, investors are looking ahead to the release of the business activities survey in July, which will provide the first economic signals into the third quarter. 

Luxury stocks in Paris, Milan, London, and Frankfurt may turn volatile as China struggles to revive flailing consumer confidence amid a protracted property market bubble. 

 

Europe Indexes and Yields

The DAX index increased by 0.3% to 18,467.59; the CAC-40 index fell by 0.4% to 7,492.39; and the FTSE 100 index advanced by 0.9% to 8,356.18.

In the previous week, the DAX index gained 0.7%, the CAC 40 index fell 1.2%, and the FTSE 100 index advanced 1.4%. 

The yield on 10-year German bonds edged higher to 2.34%, French bonds inched higher to 3.04%, the UK gilts inched higher to 4.02%, and Italian bonds increased to 3.68%.

The euro edged lower to $1.08; the British pound inched lower to $1.282; and the U.S. dollar weakened to 88.50 Swiss cents.

Brent crude decreased $0.54 to $80.58 a barrel, and the Dutch TTF natural gas fell by €1.05 to €33.40 per MWh.

 

Europe Stock Movers

ThyssenKrupp declined 1.7% to €3.51, and the German steel company lowered its 2024 outlook. 

Heineken declined 8.6% to €82.92 after the brewer reported lower-than-expected results in the first half of 2024. 

Reckitt Benckiser dropped 9.5% to 4,070.0 pence amid potential litigation worries after a U.S. jury found Abbott Laboratories' infant formula had caused a girl to develop a dangerous bowel disease. 

China-linked luxury stocks traded down ahead of the release of the factory activities update later in the week. 

LVMH declined 1.3% to €654.40, Kering fell 0.2% to €283.55, and Hermes International declined 2.4% to €2,025.0. 

Stabilus SE jumped 5.4% to €44.65 after the French industrial control solution provider reiterated its 2024 outlook. 

Net income in the fiscal third quarter increased to €24.3 million from €21.7 million a year ago. 

Merck KGaA jumped 4% to €165.80 after the pharmaceutical company raised its annual outlook. 

Energy stocks advanced after crude oil prices rose amid rising tensions in the Middle East. 

Israel stepped up its acquisition of land in the occupied territories, and Turkish Prime Minister Recep Tayyip Erdogan said Turkey could intervene in Israel's war on Gaza and help Palestinians.