European Markets Meandered as Earnings Season Gathers Pace

Bridgette Randall
14 Oct, 2024
London

European markets lacked direction in Monday's trading as investor focus remained on earnings season. 

Benchmark indexes in Paris, London, and Frankfurt traded around flatline, and market indexes rebounded in the previous week. 

Investors reviewed the latest earnings results from last week, including updates from BP plc, Continental AG, Stellantis NV, and Porsche Automobil. 

The European Central Bank's rate decision was also in view, and investors are divided about the policymakers decision. 

A significant majority of investors are hoping that the central bank will keep the benchmark rate steady, but some investors are holding out for a rate cut of as much as 25 basis points. 

Crude oil edged lower after rising in the previous two weeks as imminent risks of crude oil supplies receded. 

Investors were on defensive after China's finance minister announced a broad plan to revive the flailing property market and inject additional capital into the banking system. 

But Finance Minister Lan Fo'an failed to provide the amount and timetable for these measures, denting market enthusiasm. 

Moreover, China's export growth in September slowed sharply to 2.4%, import growth slipped to 0.3% from a year ago, and the country's trade surplus shrank to $81.7 billion from $91 billion in the previous month. 

In the week ahead, investors are awaiting the release of the current account balance, trade show balance, and industrial production in the Euro Area.

The UK is expected to release its retail sales, inflation update, and employment data.

 

Europe Indexes and Yields

The DAX index increased by 0.2% to 19,411.86; the CAC-40 index fell by 0.4% to 7,549.95; and the FTSE 100 index declined by 0.1% to 8,243.65. 

For the week, the DAX index increased 1%, the CAC-40 index added 0.4%, and the FTSE 100 index decreased 0.6%. 

The yield on 10-year German bonds edged lower to 2.26%, French bonds inched lower to 3.04%, the UK gilts edged down to 4.23%, and Italian bonds decreased to 3.54%.

The euro edged lower to $1.09; the British pound inched higher to $1.31; and the U.S. dollar strengthened to 86.04 Swiss cents.

Brent crude decreased $1.62 to $77.41 a barrel, and the Dutch TTF natural gas rose by €0.22 to €39.93 per MWh. 

 

Europe Stock Movers

Mulberry Group PLC soared 18% to 132.90 pence after Frasers Group, the 37% stakeholder in the fashion group, revised its potential cash offer for the remaining stake in the company at 150 pence per share. 

However, the majority shareholder, Challice Limited, with a 56% stake in the company, publicly rejected the revised offer and said it has no plans to sell its stake in the company to Frasers. 

Entain PLC declined 7% to 713.04 pence, and Flutter Entertainment PLC dropped 5.6% to 17,490.0 pence following a report that the UK government is looking to increase taxes on the gambling sector by as much as £3 billion. 

China-linked stocks took a dive for the second session in a row after the country's fiscal stimulus measure announcement fell short of investor expectations. 

LVMH declined 2.7% to €635.0, Kering SA dropped 3.9% to €229.90, and Hermes International dropped 2.8% to €2,084.0.