Weak China Data Weigh On European Markets, Italy's Trade Surplus Jumps to 3-Year High

Bridgette Randall
16 Sep, 2024
London

European markets struggled in Monday's trading, and investors reviewed the latest economic updates in China. 

Market indexes rebounded between 1% and 2% in the previous week, tracking gains on Wall Street amid growing hopes of a 50 basis points rate cut by the Federal Reserve this week. 

Luxury goods and vehicle makers were under pressure after China's key economic data fell short of market expectations. 

China's retail sales and industrial output rose less-than-expected in August, and the jobless rate edged higher. 

Moreover, foreign direct investment plunged 31.5% to $81.8 billion in the first eight months to August. 

Moreover, new home prices across 70 largest cities plunged 5.7%, the fastest pace in nine years, indicating weak consumer demand. 

Closer to home, Italy's trade surplus widened to €6.7 billion in July from €6.1 billion in the period a year ago, the statistical agency, ISTAT, reported Monday. 

Exports rose 6.8% to €57.2 billion, driven by a 21.4% rise in pharmaceutical products, a 15.4% increase in food products and beverages, and a 15.3% rise in chemicals. 

Imports rose 6.3% to €50.4 billion, driven by a decline in apparel imports by 7.2% and natural gas by 6.5%, offsetting the increase in pharmaceuticals by 24.6%, food products and beverages by 16.2%, and chemicals by 15.9%. 

In the week ahead, investors are also awaiting monetary policy decisions from the Bank of England, the U.S. Federal Reserve, the Bank of Japan, and the Norges Bank. 

 

Europe Indexes and Yields

The DAX index decreased by 0.2% to 18,658.57; the CAC-40 index rose by 0.03% to 7,467.89; and the FTSE 100 index decreased by 0.01% to 8,265.69. 

The yield on 10-year German bonds edged higher to 2.14%, French bonds inched lower to 2.83%, the UK gilts edged down to 3.77%, and Italian bonds decreased to 3.49%.

The euro edged up to $1.11; the British pound inched higher to $1.31; and the U.S. dollar weakened to 84.48 Swiss cents.

Brent crude increased $0.32 to $71.92 a barrel, and the Dutch TTF natural gas fell by €1.57 to €34.13 per MWh. 

 

Europe Stock Movers

Eni SpA increased 0.1% to €14.03 after a report suggested that the Italian oil company is seeking to sell more shares in its renewable energy arm, Plenitude. 

UniCredit SA advanced 0.4% to €37.07, and the Italian lender announced its plans to start repurchasing €1.7 billion of its own stock. 

Ispen SA gained 5.5% to €111.50, and the French drug maker said it has aborted its plans to commercialize its prostate cancer treatment after the late-stage trial failed to meet its main goals. 

Phoenix Group Holdings PLC decreased 3.4% to 557.0 pence after the British insurance company reported strong first-half results and halted its plans to sell its SunLife business. 

IFRS loss in the first half widened to £698 million from £245 million a year ago, reflecting higher global interest rates and adverse equities. 

IFRS adjusted operating profit increased 15% to £360 million from £313 million because of higher income in its pension and savings and retirement solutions divisions. 

In addition, the company's board approved an increase of 2.5% in cash dividends in the first half to 26.55 pence per share. 

Playtech PLC jumped 13.5% to 742.0 pence after the UK-based gambling technology company said its adjusted core profit is likely to be ahead of market expectations. 

Vossloh AG jumped 2.7% to €47.25, and the German rail technology company said it secured a €100 million contract from DB InfraGo AG, a unit of Deutsche Bahn AG. 

Mercedes Benz decreased 0.9% to €56.25, VW fell 1.6% to €90.92, and BMW dropped 0.8% to €72.72. 

Kering SA fell 0.8% to €226.85, LVMH fell 0.03% to €607.90, and Hermes International dropped 0.9% to €1,899.50. 

Rexel SA increased 8.7% to €24.97 after the electrical supplies distributor said it received and rejected an unsolicited acquisition offer from billionaire Brad Jacobs-led QXO.