European Indexes Rebound Second Consecutive Week as Global Market Sentiment Improved

Bridgette Randall
16 Aug, 2024
London

European markets advanced for the fourth session in a row amid easing worries of an economic slowdown in the world's largest economy. 

Market indexes in Paris, London, and Frankfurt edged higher after the latest updates on U.S. retail sales and jobless claims allayed fears of an economic slowdown, followed by softer inflation reports earlier in the week. 

World markets were roiled about two weeks ago after the U.S. payroll increase fell sharply in July, stoking fears of an unexpected economic slowdown. 

Last week, European markets plunged as much as 7% after the U.S. benchmark indexes slumped 10% following the weak labor market updates. 

However, market sentiment recovered this week after positive updates on U.S. retail sales, inflation, and jobless claims soothed investor fears, confirming that the economy is on track for steady growth with low inflation. 

Closer to the region, UK retail sales rebounded by 0.5% in July after contracting by 0.9% in June, the Office for National Statistics reported on Friday. 

On a yearly basis, UK retail sales increased 1.4% in July, reversing the 0.3% decline in the previous month. 

Summer discounting and sporting events drove non-food store sales, specifically at department stores and sporting goods stores, up by 1.4%. 

In addition, poor weather negatively impacted sales in the month a year ago. 

 

Europe Indexes and Yields

The DAX index increased by 0.6% to 18,285.28; the CAC-40 index rose by 0.2% to 7,440.21; and the FTSE 100 index eased by 0.5% to 8,308.86. 

The yield on 10-year German bonds edged higher to 2.21%, French bonds inched up to 2.94%, the UK gilts edged higher to 3.89%, and Italian bonds inched up to 3.59%.

The euro edged down to $1.09; the British pound inched higher to $1.29; and the U.S. dollar weakened to 86.73 Swiss cents.

Brent crude increased $2.02 to $78.99 a barrel, and the Dutch TTF natural gas rose by €0.39 to €39.21 per MWh.

 

Europe Stock Movers

Nibe Industries AB jumped 3.5% to SEK 48.86, and the sustainable energy products maker reported better-than-expected second quarter results. 

The heat pump maker said sales in the first half declined 16.8% to SEK 19.5 billion from SEK 23.5 billion, adjusted profit after tax dropped to SEK 250 million from SEK 2.5 billion, and earnings per share plunged to SEK 0.13 from SEK 1.28 a year ago. 

The company said sales were negatively affected by the lowering of inventories by distributors, but the company said demand is expected to "gradually improve" in the second half. 

Higher interest rates have negatively impacted the new construction of homes and commercial property, driving down the demand for the company's products. 

Bayer AG soared 11.1% to €29.19 after the German agrochemical company won a legal victory against U.S. claims that its Roundup weed killer caused cancer. 

An appeals court in Philadelphia, Pennsylvania, found that Monsanto Corporation, which the company acquired in 2018, failed to label that the company's products may cause cancer, violating state laws.

UBS AG increased 0.3% to CHF 26.32, and the Swiss bank announced its plans to close a $2 billion real estate fund acquired during the purchase of Credit Suisse.