European Markets Turned Down, Sweden Lowered Rates and Spain's Producer Price Deflation Decelerated

Bridgette Randall
25 Sep, 2024
London

European stock market indexes hovered near recent highs as investors reviewed the latest policy decisions from Sweden and China. 

Benchmark indexes in Paris, London, and Frankfurt traded around the flatline amid improving sentiment for the global economic outlook, but elevated tensions in the Middle East kept investors on edge. 

Crude oil traded near a two-week high after fears of a wider war in the Middle East rose after Israel bombed more territories controlled by Hezbollah in southern Lebanon. 

The latest Israel's bombing campaign has killed more than 500 people, including 35 children, and about 10,00 people have been displaced, and President Benjamin Netanyahu said that the current campaign is necessary to "restore the security balance."

On the economic front, Sweden's Riksbank lowered its benchmark rate by 25 basis points to 3.25% after the policy meeting today. 

The Riksbank lowered the rates after the policy meeting today and signaled additional rate cuts of at least 50 basis points over the next two policy meetings if the outlook for inflation and economic growth remains unchanged. 

The central bank lowered the rate by 25 basis points after the policy meeting in May and August. 

Spain's producer price deflation extended to the 18th month in a row to August, but prices fell at the slowest pace over the period. 

The annual producer price index decreased 1.3% in August following the revised 1.6% fall in the previous month.  

Vehicle and luxury goods makers were in focus for the second day in a row after the People's Bank of China lowered its 1-year loan prime rate by 30 basis points to 2.0% after holding it steady only days ago. 

The latest move follows a string of broad range of monetary policy decisions announced by the central bank on Tuesday to revive economic growth, increase investor confidence, and facilitate more property transactions. 

 

Europe Indexes and Yields

The DAX index decreased by 0.2% to 18,947.99; the CAC-40 index fell by 0.2% to 7,587.11; and the FTSE 100 index rose by 0.3% to 8,307.63. 

The yield on 10-year German bonds edged higher to 2.17%, French bonds inched lower to 2.92%, the UK gilts edged up to 3.97%, and Italian bonds decreased to 3.50%.

The euro edged lower to $1.11; the British pound inched higher to $1.33; and the U.S. dollar weakened to 84.88 Swiss cents.

Brent crude decreased $0.86 to $74.29 a barrel, and the Dutch TTF natural gas fell by €0.51 to €36.63 per MWh. 

 

Europe Stock Movers

Rightmove Plc dropped 1.3% to 674.0 pence, and the online property platform's board unanimously rejected the revised takeover offer from Australia's REA Group and said the offer "materially undervalues" the company. 

Valmet Oyj soared 10.3% to €27.87, and the Finnish pulp and paper production automation company won an order worth more than one billion euros in Brazil. 

UniCredit SpA jumped 1.9% to €37.99, and the Italian bank said it has initiated internalizing its life insurance business and terminated its partnership with Allianz S.p.A. and CNP Assurances SA. 

Orange SA decreased 0.1% to €10.69, and the French mobile telephone company said it has voluntarily decided to terminate its listing on the New York Stock Exchange. 

SAP SE declined 2.3% to €201.40 after the German software company's chef financial officer confirmed in an interview with CNBC that the company is investigated by the U.S. Justice Department for alleged price-fixing practices. 

Luxury stocks advanced for the second day in a row after China announced more monetary stimulus measures. 

LVMH increased 0.3% to €616.10, Hermes International SCA gained 1.3% to €2,038.0, and Kering SA added 0.8% to €230.75.