Eurozone Business Activities Contracted for the Fourth Month, Stocks and Euro Edged Lower

Bridgette Randall
23 Sep, 2024
London

European markets traded down in cautious trading as investors reacted to the latest political developments in the region and weak business activity data. 

Benchmark indexes in Paris, London, and Frankfurt were down between 0.2% and 0.5% after the business activity index declined for the fourth consecutive month in September. 

The HCOB Flash Eurozone Composite PMI decreased to 48.9 in September from 51.0 in August and fell to the lowest level since January, according to the data released by S&P Global. 

The service sector growth slowed to 50.5 from 52.9, and the manufacturing downturn extended to the 18th month in a row to 44.5 from 45.8 in the previous month, respectively. 

The composite PMI fell at the fastest pace in 15 months after the Olympic games had temporarily boosted activities in France. 

The euro dropped to $1.11 after the report, amid concerns that the European Central Bank may need to accelerate easing of its monetary policy and provide additional support. 

The British pound jumped to a two-and-a-half years high of $1.33 as the UK's Labour Party kicked off its annual conference on Monday. 

In political news, France's prime minister, Michel Barnier, said his government is open to increasing taxes for big businesses and the wealthiest citizens to tackle its large and widening budget deficit.

The Social Democratic Party, led by Olaf Scholz, narrowly defeated far-right party Alternative for Germany in an election in the east German state of Brandenburg. 

 

Europe Indexes and Yields

The DAX index increased by 0.5% to 18,824.07; the CAC-40 index fell by 0.3% to 7,480.31; and the FTSE 100 index declined by 0.1% to 8,219.74. 

The yield on 10-year German bonds edged lower to 2.15%, French bonds inched higher to 2.93%, the UK gilts edged up to 3.91%, and Italian bonds decreased to 3.52%.

The euro edged lower to $1.11; the British pound inched higher to $1.33; and the U.S. dollar weakened to 84.94 Swiss cents.

Brent crude increased $0.18 to $74.66 a barrel, and the Dutch TTF natural gas rose by €0.20 to €34.80 per MWh. 

 

Europe Stock Movers

Rightmove Plc increased 1.2% to 682.60 pence after Australia's REA Group increased its offer for the UK-based property portal.

Commerzbank added 0.2% to €15.71, and the German government agency said in a statement that it has no plans to sell its remaining 12% stake in the bank. 

Scout24 SE increased 2.3% to €77.30, and Germany's largest online property platform operator announced its plans to commence its stock buyback program worth €150 million. 

The company plans to launch its stock buyback plan in the next few weeks and end in 2026.

UBS Group AG was nearly unchanged at CHF 25.46 on reports that the Swiss regulator is investigating the collapse of Credit Suisse ahead of its merger with the bank. 

Siemens AG increased 0.4% to €167.26, and the company said it plans to separate its eMobility business.