European Markets Dragged Down by Weak Auto Stocks, Italy's Inflation Eased to 2024 Low

Bridgette Randall
30 Sep, 2024
London

European stock market indexes traded lower in Monday's trading, bond yields edged higher, and the euro held firm against the dollar.

Benchmark indexes in London, Paris, and Frankfurt fell as investors debated future rate paths and calls for lowering interest rates rose amid cooling inflation.

Italy reported the annual inflation rate eased in September and dropped to the lowest level in 2024, reflecting a weakening of inflation in energy and manufactured goods, according to the statistical agency, ISTAT. 

Consumer price inflation slowed to 0.7% from 1.1% in August, and core inflation, which excludes volatile food and energy prices, eased to 1.8% from 1.9% in the previous month. 

Investors awaited the release of the national inflation report from Germany after most German states reported weakening inflation forces in September, according to preliminary data released today. 

Last week France and Spain reported a slowing of inflation, largely reflecting weaker energy prices, but core inflation held steady because of elevated service inflation. 

The U.K.'s second quarter gross domestic product increase from the previous quarter was revised down to 0.5%, slower than the previously estimated rise of 0.6%. 

 

Europe Indexes and Yields

The DAX index decreased by 0.5% to 19,375.28; the CAC-40 index fell by 1.6% to 7,670.23; and the FTSE 100 index declined by 0.6% to 8,273.59. 

The yield on 10-year German bonds edged higher to 2.15%, French bonds inched higher to 2.95%, the UK gilts edged up to 4.0%, and Italian bonds increased to 3.48%.

The euro edged lower to $1.11; the British pound inched higher to $1.33; and the U.S. dollar weakened to 84.41 Swiss cents.

Brent crude decreased $0.15 to $71.40 a barrel, and the Dutch TTF natural gas fell by €0.45 to €39.09 per MWh. 

 

Europe Stock Movers

Rightmove PLC decreased 613.40 pence and extended losses for the second day in a row after the company's board rejected a £6.2 billion offer from Australia-based REA Group. 

Oil exploration companies were in focus after tensions in the Middle East rose and Israel carried out more targeted bombing campaigns in Beirut and accelerated its land grab in Gaza. 

Shell PLC increased 0.1% to 2,426.50 pence. BP plc gained 0.6% to 390.55 pence, and TotalEnergies SE declined 1.4% to €58.35. 

Automakers traded down after Volkswagen AG issued a profit warning for the second time in three months and Stellantis NV lowered its annual outlook amid weakness in sales across all regions.

Stellantis dropped 15.4% to €12.36 and extended losses to more than 60% from a high of €27 in March; Volkswagen decreased 2.5% to €94.66 and traded at a five-year low. 

3i Group plc decreased 2.6% to 3,300 pence, and Shadowfall Capital reportedly took a multi-million-pound short position in the private equity venture capital firm.