Eurozone GDP Growth Accelerated, Standard Chartered and UBS In Focus After Earnings

Bridgette Randall
30 Oct, 2024
London

Stock market indexes in the eurozone traded down as investors reviewed the latest batch of corporate results. 

Benchmark indexes in Paris, Milan, Frankfurt, and London traded in a tight range with a downward bias after investors scaled back rate-cut expectations following stronger-than-expected economic growth in the eurozone. 

Eurozone GDP growth accelerated in the third quarter, and all four leading economies of the region reported better-than-expected quarterly updates. 

A mixed batch of corporate earnings also weighed on the market sentiment after Volkswagen, Moncler, Capgemini, Campari Milano, and GSK reported results. 

 

Eurozone GDP Growth Accelerated In the Third Quarter 

Seasonally adjusted third quarter GDP growth accelerated to 0.9% from a year ago, Eurostat reported on Wednesday. 

The estimate is preliminary, based on incomplete data, and subject to significant revisions. 

From the previous quarter, seasonally adjusted growth increased 0.4%, after expanding 0.2% in the previous quarter. 

GDP expanded 0.2% in Germany, 0.4% in France, and 0.8% in Spain but stalled in Italy from the previous quarter, respectively. 

From a year ago, GDP contracted in Germany by 0.2% but rose 0.4% in Italy, 1.3% in France, and 3.4% in Spain. 

 

GDP Growth In France and Germany Diverges In the Third Quarter 

Separately, Germany and France reported their estimates of economic growth in the third quarter. 

Seasonally adjusted real GDP growth decreased 0.2% from a year ago in the third quarter, according to the Federal Statistics Office, or Destatis. 

The statistical office also revised the second quarter GDP contraction estimate to 0.3% from the previous estimate of 0.1%. 

However, seasonally adjusted third quarter real GDP growth accelerated to 0.4% from 0.2% in the second quarter, stimulated by the Paris Olympics and Paralympic games, according to France's statistical office, INSEE. 

 

Europe Indexes and Yields

The DAX index decreased by 0.9% to 19,310.77; the CAC-40 index fell by 1.4% to 7,404.42; and the FTSE 100 index fell by 0.3% to 8,195.15. 

The yield on 10-year German bonds edged lower to 2.30%, French bonds inched higher to 3.05%, the UK gilts edged down to 4.22%, and Italian bonds increased to 3.56%.

The euro edged lower to $1.08; the British pound inched higher to $1.29; and the U.S. dollar strengthened to 86.72 Swiss cents.

Brent crude increased $0.64 to $71.76 a barrel, and the Dutch TTF natural gas fell by €0.02 to €42.29 per MWh. 

 

Europe Stock Movers

UBS AG declined 1.9% to CHF 27.92 despite the Swiss bank reporting higher-than-expected third quarter earnings of $1.4 billion, driven by cost cutting and higher loan income. 

Standard Chartered PLC increased 3.2% to 904.0 pence after the UK-based bank upgraded its 2024 net income outlook after profit increased in the third quarter. 

SKF AB Class B increased 2.5% to SEK 208.40 after the Swedish bearings maker agreed to sell its Hanover, Pennsylvania, plant for SEK 2.6 billion, or $216 million. 

Moncler SpA declined 2.4% to €51.74 after the Italian outdoor fashion company reported a fall in revenue in the third quarter. 

Revenue in the nine-month period increased 6% on a constant currency basis to €1.87 billion from €1.81 billion a year ago. 

Third quarter revenue decreased 3%, driven by a 9% decline in the wholesale channel. 

Sales in Asia led the rise across all regions and increased 11%, followed by a 6% rise in the wider region of Europe, the Middle East, and Africa, and a modest rise of 3% in the Americas. 

Capgemini SA decreased 6.7% to €164.25 after the technology services provider lowered its 2024 revenue outlook for the second time this year.

Volkswagen AG increased 1.4% to €93.65 after the German vehicle maker reported slightly higher-than-expected revenue but operating profit plunged 42%. 

The vehicle maker also reiterated its annual revenue outlook. 

Schneider Electric SE decreased 0.3% to €240.20 despite the energy management and automation company reporting record revenue in the third quarter and reiterating its annual sales outlook. 

Sales in the third quarter increased 8% to €9.31 billion, driven by strong performance in its systems and services segments.