European Markets Attempt to Extend Weekly Gains, Eurozone Lending Growth Accelerates to 8-Month High

Bridgette Randall
28 Aug, 2024
London

Stock market indexes in the Euro Area advanced amid caution ahead of inflation data in the region and retail sales updates in Spain. 

Semiconductor equipment makers were in focus ahead of widely anticipated earnings from artificial intelligence leader Nvidia Corp. 

Benchmark indexes in Frankfurt and Paris advanced more than 0.5%, but leading indexes in London lacked direction in Wednesday's trading. 

Nvidia, widely seen as a bellwether for artificial intelligence investment by key technology companies, has soared more than 160% in the year so far and 1,000% in the last three years. 

The advanced chip designer's revenue has jumped more than 80% for eight quarters in a row, and investors are hoping for similar revenue growth in the current quarter. 

Semiconductor equipment could turn volatile if the company misses elevated revenue and earnings expectations set by global tech investors. 

On the economic front, the Euro Area's bank lending to households increased 0.5% to €6.883 trillion, accelerating from a 0.3% increase in the previous month, the European Central Bank reported Wednesday. 

In addition, lending to private corporations increased 0.6% to €5.14 trillion, and overall private sector lending, including non-financial corporations and households, picked up to 1.3% from 1.1% in the previous month. 

 

Europe Indexes and Yields

The DAX index increased by 0.8% to 18,831.22; the CAC-40 index rose by 0.5% to 7,603.56; and the FTSE 100 index fell by 0.1% to 8,336.07. 

The yield on 10-year German bonds edged lower to 2.23%, French bonds inched down to 2.96%, the UK gilts edged down to 3.94%, and Italian bonds decreased to 3.61%.

The euro edged down to $1.12; the British pound inched higher to $1.32; and the U.S. dollar weakened to 84.65 Swiss cents.

Brent crude decreased $1.28 to $78.87 a barrel, and the Dutch TTF natural gas rose by €0.65 to €39.36 per MWh. 

 

Europe Stock Movers

Mining companies retreated after copper prices fell from a five-week high of $4.20 per pound amid a weak China demand growth outlook. 

BHP Group slashed its imminent China group outlook but held out for higher prices, citing a prolonged global supply deficit. 

Antofagasta decreased 4.3% to 1,828.28 pence, Anglo American declined 1.8% to 2,239.0 pence, Glencore PLC dropped 1.8% to 403.15 pence, and BHP Group fell 1.5% to 2,064.0 pence. 

Hochschild Mining Plc declined 5.6% to 182.40 pence despite the precious metal mining company reporting strong first-half results on higher output and realized prices. 

Oil and natural gas exploration companies traded down following the decline in crude oil prices after tensions in the Middle East eased, but the prospect of a wider war remains elevated. 

BP Plc declined 0.9% to 428.20 pence, Shell PLC dropped 1.5% to 2,685.0, TotalEnergies SE dropped 0.4% to €62.48, and Repsol SA fell 1.3% to €12.48. 

Elekta AB increased 3.5% to SEK 71.45, and the Swedish radiation therapy company reported strong fiscal first-quarter results. 

LEG Immobilien SE fell 1.7% to €86.12 after the German real estate company launched a €500 million senior unsecured convertible bond offering due in 2030. 

The company intends to use proceeds to repay debt and for general corporate expenses.