European Markets Extended Weekly Ahead of Rate Decisions Despite Weak Corporate Results

Bridgette Randall
22 Jan, 2025
London

European markets advanced in Wednesday's trading and extended weekly gains ahead of rate decisions by the European Central Bank next week. 

Benchmark indexes in Paris, Frankfurt, Milan, and London edged higher amid a rate cut of at least 25 basis points at the end of the policy meeting on January 30. 

The policy committee lowered its key lending rate range by 100 basis points in 2024, and investors are anticipating additional rate cuts totaling 100 basis points in 2025. 

However, any rate cut after the imminent meeting is not certain amid rising geopolitical uncertainty and trade tensions with the U.S. and China. 

Moreover, inflation outlook in the eurozone is likely to be revised higher as the services sector inflation is likely to accelerate in the months ahead, and last year's lower energy price base is also  going to contribute to inflationary forces. 

 

Europe Indexes and Yields

The DAX index moved higher by 1.02% to 21,256.10; the CAC-40 index jumped 0.67% to 7,823.06; and the FTSE 100 index rose by 0.38% to 8,580.43.  

The yield on 10-year German bonds inched lower to 2.48%, French bonds eased to 3.25%, the UK gilts declined to 4.60%, and Italian bonds edged lower to 3.57%.

The euro edged up to $1.04; the British pound inched higher to $1.23; and the U.S. dollar was lower to 90.59 Swiss cents.

Brent crude increased $0.33 to $79.71 a barrel, and the Dutch TTF natural gas fell by €0.90 to €46.23 per MWh.

 

Europe Stock Movers

Adidas Group gained 6.5% to €259.20 after the German sportswear company reported a surge in fourth-quarter sales and swung to a profit from a loss a year ago.

Schaeffler AG plunged 12.4% to €3.97 after the German car-parts supplier said fiscal year 2024 results fell short of company's estimates.

Barry Callebaut AG slumped 6% to CHF1.08 as the Swiss-Belgian chocolate maker and cocoa processor expects annual sales volume to fall by a low single-digit percentage, after previously forecasting flat cocoa sales volume for the year.

EasyJet Plc dropped 4.4% to £488.89 pence after the UK-based discount airline posted a slight decline in losses in the fiscal first quarter despite an increase of 7% in passenger count.  

Alstom fell 0.5% to €20.71 despite the French railroad engineering company achieved 8% increase in new orders totaling €4.3 billion in the latest quarter.  

Porsche Automobil Holding SE added 0.3% to €37.11 after the German sports car maker reiterated its profit margin range between 14% and 15% while working to reduce its footprint in China.

Porsche will post financial results on March 12.

Renault traded unchanged at €48.17 after the French car maker named Duncan Minto as its new chief financial officer, elevating the executive who has overseen finances at its Alpine sports-car brand since October 2023.