Political Uncertainty In Germany and France Keeps European Market Indexes Under Pressure

Bridgette Randall
10 Dec, 2024
London

European markets struggled to advance ahead of the rate decisions and ongoing political turmoil in Germany and France. 

Benchmark indexes in Paris, Frankfurt, Milan, and London struggled to stay above the flatline as France struggled to form the next government, and the ECB is set to announce its rate decisions on Thursday.

President Emmanuel Macron invited leaders of political parties to discuss the selection of the next prime minister, excluding the far-right National Rally party and the far-left party France La Insoumise. 

Historically, French politics has avoided coalitions of parties that compromise on ideas, but with not a single party holding a majority to form the government, political leaders are learning the art of compromise. 

On the economic front, Germany's consumer price inflation edged higher to 2.2% in November from 2.0% in October, confirming the preliminary estimate released by the Destatis. 

Consumer price inflation in Norway dropped to 2.4% in November from 2.6% in October, Statistics Norway reported Tuesday. 

Consumer prices rose at the slowest pace since December 2020 in the energy-rich nation, primarily due to the slowdown in housing and utility costs to 2.1% from 4.5% in the previous month.   

Mining stocks in London and luxury goods stocks in Paris faced selling pressure after China's exports rose at a slower-than-expected pace in November. 

China's export growth slowed down in November, but the overall exports stayed elevated amid the sustained demand for its products in the ASEAN region, the European Union, and the U.S. 

On an annual basis, China's exports increased 6.7% to $312.3 billion, and imports declined 3.9% to $214.9 billion, resulting in a trade surplus surge of 40% to $97.4 billion. 

Exports to the U.S. rose 8%, to the European Union by 7.2%, to Japan by 6.4%, and to the ASEAN region by 20.1%. 

China's exports in the first eleven months to November increased 5.4% to $3.24 trillion, driven by higher shipments of textiles, aluminum products, and mechanical and electrical products. 

 

Europe Indexes and Yields

The DAX index decreased by 0.2% to 20,318.38; the CAC-40 index fell by 0.6% to 7,435.80; and the FTSE 100 index inched lower by 0.6% to 8,300.01.

The yield on 10-year German bonds edged higher to 2.12%, French bonds inched down to 2.85%, the UK gilts increased to 4.30%, and Italian bonds increased to 3.20%.

The euro edged higher to $1.05; the British pound inched up to $41.27; and the U.S. dollar eased to 87.99 Swiss cents.

Brent crude decreased $0.41 to $71.72 a barrel, and the Dutch TTF natural gas rose by €0.17 to €45.10 per MWh. 

 

Europe Stock Movers

Delivery Hero SE plunged 10.2% to €31.92 after the Germany-based delivery company's Middle Eastern unit Talabat completed its initial public offering and commenced trading in Dubai. 

The United Arab Emirates' largest public offering in 2024 was priced at 1.60 dirham and advanced 6% to 1.70 dirham in trading. 

Delivery Hero sold a 20% stake in the company and raised about €1.9 billion. 

Volkswagen AG increased 1.3% to €88.25, and the company and workers' union agreed to extend talks to agree on a framework for plant closures. 

TeamViewer SE declined 12.7% to €10.99, and the German remote access and support software developer agreed to acquire the UK-based 1E for an enterprise value of $720 million.

Centrica PLC decreased 0.2% to 131.10 pence after the parent company of British Gas expanded its stock repurchase plan by £300 million to £1.5 billion. 

Ashtead Group declined 12.5% to 5,489.59 pence after the equipment rental company said it plans to move its stock listing to New York from London. 

FirstGroup plc increased 4% to 160.30 pence after the company agreed to acquire RATP London from RATP Developpement for an enterprise value of £90 million.