European Markets Extend Weekly Losses; Russia Hikes Rates, Spain's Jobless Rate Drops

Bridgette Randall
25 Oct, 2024
London

European markets struggled to advance in Friday's trading as investors reassessed rate paths and reviewed the latest batch of earnings. 

Benchmark indexes in Paris, London, Milan, and Frankfurt traded around the flatline on a light day of economic data releases. 

Sanofi and  NatWest gained after reporting better-than-expected earnings, but Mercedes Benz Group fell after earnings plunged 64% following the sales weakness in China. 

Spain's jobless rate dropped to 11.2% in the third quarter, the National Statistics Institute reported Friday. 

The jobless rate dropped to the level last seen in the second quarter of 2008, as the number of unemployed people declined by 1,200 from the previous quarter to 2.754 million. 

The number of employed individuals increased 138,300 to 21.823 million, lifting the employment participation rate to 59.04% from 58.9% in the previous quarter. 

The Bank of Russia increased its key lending rate by 200 basis points to 21% and signaled that policymakers are ready to increase rates at the next meeting in December. 

After the latest hike, rates are now at a record high, surpassing the previous high of 20% while shoring up the ruble following the invasion of Ukraine in March 2022. 

The policy committee noted that inflation is running higher than previously estimated as the nation is struggling to adjust to labor shortages, the economy is suffering under Western sanctions, and there is a rapid increase in government spending. 

 

Europe Indexes and Yields

The DAX index increased by 0.2% to 19,472.90; the CAC-40 index fell by 0.1% to 7,493.28; and the FTSE 100 index decreased by 0.2% to 8,252.02. 

The yield on 10-year German bonds edged higher to 2.27%, French bonds inched higher to 3.01%, the UK gilts edged up to 4.23%, and Italian bonds decreased to 3.49%.

The euro edged lower to $1.08; the British pound inched higher to $1.29; and the U.S. dollar strengthened to 86.70 Swiss cents.

Brent crude increased $0.60 to $74.97 a barrel, and the Dutch TTF natural gas rose by €0.59 to €42.87 per MWh. 

 

Europe Stock Movers

Vinci SA declined 2.7% to €101.60 after the French construction company reported weak revenue growth in the third quarter and confirmed its annual outlook. 

Revenue in the third increased 1.4% to €18.53 billion from €18.27 billion, and its order book swelled to €66.8 billion. 

The company said net income in the current year is likely to be close to the level in 2023, before a potential increase in corporate income tax is considered by the parliament. 

In Frankfurt trading, 18 companies included in the 40-member DAX index traded higher. 

Daimler Truck Holding AG increased 3.7% to €38.88, Siemens Energy gained 2.4% to €37.88, and Heidelberg Materials added 2.2% to €98.98. 

Rheinmetall AG decreased 2.2% to €492.20, Continental AG dropped 2.3% to €58.08, and Qiagen NV declined 1.3% to €38.46. 

Resource companies traded higher in London ahead of China's large fiscal stimulus measures following the approval of the next budget by the committee of the National People's Congress in the next two weeks. 

Antofagasta increased 0.2% to 1,798.0 pence, Anglo American advanced 1.1% to 2,417.50 pence, and Glencore PLC edged higher 0.4% to 399.70 pence.