European Markets Struggle Near Multi-month Lows

Bridgette Randall
08 Aug, 2024
London

European markets struggled to get traction after two days of gains, as caution prevailed in global market trading. 

Benchmark indexes in Paris, London, and Frankfurt traded down amid stagnant domestic economic conditions, weak consumer confidence compounded by a fragile economic recovery in China, and the growing possibility of a U.S. economic slowdown. 

Investors were cautious, and an additional batch of mixed earnings did little to improve market sentiment. 

China is set to release its official consumer and producer price inflation updates on Friday, and the initial jobless claims are also closely watched in the U.S. later in the day. 

The European Central Bank can keep its rate cut plan intact if there is increased confidence that inflation is on a sustainable downward path, ECB Governing Council member and Bank of Finland governor Olli Rehn commented on Thursday. 

Global markets gyrated after a string of U.S. economic data suggested a possible economic downturn and a weakening of labor market conditions. 

Market volatility spiked to a level not seen since 1987, after the Bank of Japan lifted its interest rates, forcing the unwinding of the yen carry trade and strengthening the yen to an 8-month high. 

 

Europe Indexes and Yields

The DAX index decreased by 0.7% to 17,500.76; the CAC-40 index fell by 1.0% to 7,194.02; and the FTSE 100 index declined by 1.0% to 8,084.26. 

The yield on 10-year German bonds edged lower to 2.23%, French bonds inched lower to 2.97%, the UK gilts inched higher to 3.94%, and Italian bonds decreased to 3.67%.

The euro edged down to $1.09; the British pound inched lower to $1.268; and the U.S. dollar weakened to 85.80 Swiss cents.

Brent crude decreased $0.29 to $78.06 a barrel, and the Dutch TTF natural gas rose by €0.08 to €38.81 per MWh.

 

Europe Stock Movers

Zurich Insurance Group decreased 2.5% to CHF 452.0 despite the Swiss reinsurance company reporting first-half earnings that surpassed market expectations. 

Beazley PLC jumped 12.5% to 716.50 pence after the UK-based insurance company reported its first-half results and revised its 2024 combined ratio estimate. 

Allianz increased 1.3% to €252.50 after the German insurance company reported better-than-expected second quarter earnings and reiterated its annual outlook. 

Siemens AG declined 0.8% to €154.64 after the German industrial company reported better-than-expected operating earnings and confirmed its full-year outlook.

Uniper SE declined 4.2% to €40.58 after the German utility company agreed to sell significant future hydropower production as a part of its hedging strategy. 

Deutsche Telekom increased 2.2% to €24.45 after the wireline and wireless telecom service provider reported in-line core earnings in the second quarter and raised its free cash flow outlook.

Sandoz Group dropped 6.2% to CHF 33.56, and the generic and biosimilar medicines maker reported first-half net income slumped 36%. 

Persimmon plc increased 2.5% to 1,575.50 pence after the UK-based home builder said it plans to build near the top end of the previously announced target range in 2024. 

Hikma Pharma soared 7.5% to 1,978.0 pence after the company posited strong half-year results and revised its full-year 2024 estimate. 

PageGroup declined 1.9% after the UK-based recruiting company reported a decline in revenue and earnings in the first half amid "challenging" market conditions. 

Entain PLC jumped 8.8% to 569.80 pence after the gambling group raised its annual outlook.