European Stock Markets Attempted, Euro Hovers Near 2-Year Low

Bridgette Randall
14 Jan, 2025
London

European stock market indexes advanced, and bond yields hovered near recent highs amid ongoing rate path uncertainties and political turmoil in France and Germany. 

Benchmark indexes in Frankfurt, Paris, Milan, and London rebounded from losses in the previous session as investors awaited the release of the U.S. trade policy. 

In the absence of domestic economic news, investors debated the possible rate paths and the impact of new and tougher U.S. sanctions on Russia's energy, shipping, and insurance companies. 

The euro and the pound hovered near two-year lows amid reduced expectations of additional rate cuts by the U.S. Federal Reserve, boosting the U.S. dollar. 

Moreover, a sluggish economic outlook in the eurozone is likely to keep the European Central Bank on track to lower its reference rate between 100 and 150 basis points over the next six months. 

 

Europe Indexes and Yields

The DAX index increased by 0.8% to 20,289.72; the CAC-40 index rose by 1.1% to 7,485.42; and the FTSE 100 index inched higher by 0.2% to 8,243.07. 

The yield on 10-year German bonds edged higher to 2.59%, French bonds rose to 3.45%, the UK gilts increased to 4.87%, and Italian bonds edged lower to 3.80%.

The euro edged lower to $1.02; the British pound inched lower to $1.214; and the U.S. dollar eased to 91.60 Swiss cents.

Brent crude decreased $0.66 to $80.34 a barrel, and the Dutch TTF natural gas fell by €0.12 to €48.15 per MWh. 

 

Europe Stock Movers

Ocado Group PLC gained 9.4% to 295.30 pence after the UK-based online grocery portal operator and grocery technology company reported a 17.5% surge in quarterly revenue. 

Retail revenue increased by 17.5% to £715.8 million from £609.4 million, driven by a 16.9% increase in weekly orders to 476,000 from 407,000 a year ago. 

The number of active customers increased 12.1% to 1.1 million from 0.998 million, the average item price was nearly unchanged at £2.75, and average basket value rose 0.2% to £120.85 from £120.62 a year ago. 

The company estimated fiscal year 2024 ending on December 1 revenue increased 13.9% to £2.69 billion, and the retailer reiterated its target of reaching "high mid single-digit adjusted EBITDA margin by the end of the first half. 

JD Sports Fashion PLC decreased 8.6% to 87.94 pence after the specialty retailer issued a profit warning. 

The company said organic comparable sales in December increased 3.4%, but comparable sales over the two-month period to December decreased 1.5% amid "current headwinds" in the market. 

The retailer held out for full-year organic revenue growth of 5%, and the company said it will release full financial statements in March.

JD Sports estimated pre-tax earnings before adjustments to range between £915 million and £935 million, and full-year gross margins are expected to be around 48%, matching the level in the year ago.