German Consumer Sentiment Improved; BP, Banco Santander, HSBC, and Novartis In Focus After Earnings

Bridgette Randall
29 Oct, 2024
London

European markets advanced as investors reviewed a fresh batch of earnings and awaited a slew of domestic economic releases later in the week. 

Benchmark indexes in London, Paris, Milan, and Frankfurt edged higher in a busy week of earnings and economic data flow. 

The eurozone GDP in the third quarter is likely to expand by 0.2%, and consumer inflation in October is likely to stay below the 2% target rate set by the central bank. 

Third-quarter GDP in France and Italy is likely to increase by a fraction, but in Germany it will shrink by 0.3%. 

Economists are anticipating unemployment in the Euro Area to stay near the record level of 6.4%.

Investors are anticipating the U.K.'s Autumn Budget to show significant revisions in taxes on high-income earners and key wage adjustments that could impact operating costs for businesses. 

A private survey of forward-looking consumer sentiment showed an improvement for the second month in a row. 

The forward-looking consumer sentiment improved to -18 in November from -21 in October as income expectations and willingness to spend improved, according to the latest survey published by the Nuremberg Institute for Market Decisions and market research group GfK.  

Retail store prices declined the most in three years amid a decline in non-food prices and easing food inflation, noted the British Retail Consortium. 

The shop price annual decline accelerated to 0.8% in October from a fall of 0.6% in September, the largest annual rate of decline since August 2021. 

 

Europe Indexes and Yields

The DAX index increased by 0.3% to 19,582.79; the CAC-40 index rose by 0.4% to 7,585.20; and the FTSE 100 index advanced by 0.1% to 8,296.67. 

The yield on 10-year German bonds edged higher to 2.31%, French bonds inched higher to 3.04%, the UK gilts edged down to 4.27%, and Italian bonds increased to 3.51%.

The euro edged lower to $1.08; the British pound inched higher to $1.29; and the U.S. dollar strengthened to 86.69 Swiss cents.

Brent crude increased $0.77 to $72.19 a barrel, and the Dutch TTF natural gas fell by €0.50 to €43.17 per MWh. 

 

Europe Stock Movers

HSBC Holdings increased 4% to 719.80 pence after the UK- and Hong Kong-based bank reported rising revenue and earnings in the September quarter. 

Revenue increased 5% to $17.21 billion from $16.7 billion, and net income advanced 8% to $6.7 billion from $6.2 billion a year ago, respectively.  

The largest European bank also announced a stock repurchase plan of $3 billion. 

China-linked luxury product makers advanced more than 1% ahead of China's top legislative committee's meeting next week to finalize the annual budget and approve the issuance of additional long-term bonds. 

Hermes International increased 0.9% to €2,149.0, Kering SA gained 0.8% to €244.95, and LVMH advanced 0.7% to €642.10. 

adidas AG gained 1.3% to €216.50 after the German sportswear maker reported a 71% rise in its third quarter profit and higher sales in China. 

The company also lifted its annual profit estimate for the third quarter in a row. 

Deutsche Lufthansa AG decreased 2.7% to €6.68 after the German airline reported a 9% decline in its operating profit in the third quarter. 

BP plc decreased 2.5% to 389.14 pence after the UK-based energy company reported its weakest quarterly profit in four years. 

Weaker oil trading profit and a decline in refining margin weighed down net income and cash flow in the quarter. 

Novartis AG decreased 3% to CHF 96.83 despite the Swiss pharmaceutical company raising its annual profit outlook for the third quarter in a row. 

Banco Santander SA decreased 1.8% to €4.50 after the Spain-based bank reported lower-than-expected quarterly results.