European Markets Extended 3-day Rally, UK GDP Growth Slowed In Second Quarter

Bridgette Randall
15 Aug, 2024
London

European markets were little changed in Thursday's trading, and investors reviewed the latest GDP update in the UK and key economic data released by China. 

Benchmark indexes in Frankfurt, Paris, and London traded around the flatline amid weak investor sentiment and rate path uncertainties. 

The U.K.'s gross domestic product in the second quarter slowed to an increase of 0.6% after rising 0.7% in the first quarter, the Office for National Statistics reported Thursday. 

The broad-based increase in the service sector contributed to the increase in the second quarter. 

The service sector expanded by 0.8%, with scientific and research activities soaring by 11%; manufacturing sector activities decreased by 0.1%, driven by a fall in transportation equipment by 1.8%; and textile, apparel, and leather products declined by 6.6%. 

Construction activities shrank by 0.1% in the second quarter. 

Government spending increased by 1.4%, and household spending rose by 0.2%. 

Investors also reviewed China's retail sales, industrial output, and new home price updates. 

Retail sales rebounded to an increase of 2.7% from a year ago, after falling to a 2% increase in June from 3.7% in May, the National Bureau of Statistics reported. 

Retail sales rose for the 18th month in a row, driven by a rising demand for beverages, sports and recreational goods, and communication equipment. 

Industrial output edged slightly lower to 5.1% in July from 5.3% in June, the statistical agency reported in a separate report on Thursday. 

New home prices in 70 of the largest cities declined 4.9% from a year ago in July, extending the decline to the 13th month in a row, the statistical agency said in a note on Thursday. 

 

Europe Indexes and Yields

The DAX index increased by 0.2% to 17,921.19; the CAC-40 index fell by 0.2% to 7,322.07; and the FTSE 100 index advanced by 0.04% to 8,284.45. 

The yield on 10-year German bonds edged lower to 2.19%, French bonds inched down to 2.92%, the UK gilts edged lower to 3.85%, and Italian bonds inched up to 3.57%.

The euro edged down to $1.10; the British pound inched lower to $1.281; and the U.S. dollar weakened to 86.62 Swiss cents.

Brent crude increased $0.59 to $80.34 a barrel, and the Dutch TTF natural gas rose by €0.45 to €39.33 per MWh.

 

Europe Stock Movers

Admiral Group soared 7% to 3,009.0 pence after the home and vehicle insurer reported better-than-expected first-half results. 

Rank Group jumped 7.2% to 75.05 pence, and the parent company of Bingo Mecca swung to profit in the year ending in June, driven by higher revenue. 

Adyen NV advanced 8.7% to €1,236.80, and the Dutch payment solution provider reported strong first-half results and announced its plans to expand its business in India. 

Orsted AS decreased 6.8% to DKK 393.60, and the largest offshore wind farm operator reported weaker-than-expected results because of significant impairment charges. 

Net loss in the second quarter expanded to DKK 1.7 billion from DKK 538 million, driven by impairment losses of DKK 3.2 billion linked to the FlagshipONE project in Northern Sweden and delays related to the onshore substation Revolution Wind project near the shores of Rhode Island, U.S.A. 

Geberit AG dropped 3.5% to CHF 509.80 after the Swiss sanitary products maker reported quarterly results. 

Revenue in the second quarter increased by 4.4% to CHF 800.7 million from CHF 769.1 million, net income advanced by 4.1% to CHF 159.8 million from CHF 153.5 million, and earnings per share rose to CHF 4.82 from CHF 4.55 a year ago. 

The sanitary products company estimated 2024 sales in local currencies to match the previous year and the EBITDA margin to ease to 29%. 

The company also announced a stock buyback plan of CHF 300 million over the next two years.