European Indexes Lacked Direction, Investor Sentiment Plunged Amid Rising Geopolitical Tensions

Bridgette Randall
13 Aug, 2024
London

European markets lacked direction in Tuesday's trading, and investors awaited the release of key economic data in the eurozone, the U.S., and the U.K. 

Benchmark indexes in Paris, London, and Frankfurt headed lower and extended recent losses amid rate path uncertainties and a weak economic outlook. 

The U.K. jobless rate eased to 4.2% in the three months to June from 4.4% in the period to May, according to the latest data released by the Office for National Statistics. 

Regular pay excluding bonuses increased 5.4% to £645 per week in three months to June, according to a separate report released by the ONS. 

The weekly pay increase slowed from 5.8% in the previous three-month period ending in May. 

Adjusted for inflation, regular weekly pay, excluding bonus, increased to 2.4%, slower than 2.5% in the previous three-month period. 

The ZEW Indicator of Economic Sentiment for the eurozone decreased for the second month in a row in August 2024, falling 25.8 points to a nine-month low of 17.9. 

The weakening domestic economic backdrop, rising tensions in the Middle East, and ongoing war in Ukraine contributed to the deterioration in sentiment for the second month in a row. 

In the meantime, the indicator of the current economic situation increased by 3.7 points to -32.4, and inflation expectations edged up by 2 points to -39.1.

 

Europe Indexes and Yields

The DAX index decreased by 0.2% to 17,689.34; the CAC-40 index fell by 0.3% to 7,233.12; and the FTSE 100 index decreased by 0.1% to 8,197.14. 

The yield on 10-year German bonds edged lower to 2.20%, French bonds inched down to 2.95%, the UK gilts edged lower to 3.90%, and Italian bonds inched up to 3.61%.

The euro edged down to $1.09; the British pound inched lower to $1.272; and the U.S. dollar weakened to 86.69 Swiss cents.

Brent crude decreased $0.69 to $82.03 a barrel, and the Dutch TTF natural gas fell by €0.41 to €39.41 per MWh.

 

Europe Stock Movers

Just Group soared 17% to 137.20 pence after the retirement income and services provider reported better-than-expected first-half results and lifted its 2024 estimates. 

Dowlais Group decreased 8% to 53.85 pence after the UK-based automotive parts maker reported a wider loss in the first half and the company lowered its annual revenue outlook. 

Valneva SE increased 5.2% to €3.23, and the French biotech company's net income in the first half swung to profit and confirmed its annual revenue outlook. 

Brenntag declined 1% to €63.22, and the German chemical distributor lowered its full-year estimate. 

Evotec SE gained 3.4% to €5.58, and the German drug maker achieved a significant milestone in its partnership with Bristol Myers Squibb, triggering a performance-based payment of $75 million. 

HelloFresh SE jumped 10.9% to €5.99 after the meal-kit provider reported better-than-expected results in the second quarter.