Forex Analysis & Reviews: Weak euro and strong reporting provide European stock market with strong growth
time 16.08.2022 11:45 PM
time Relevance up to, 17.08.2022 06:02 PM

The key stock indicators of Western Europe showed an increase on Tuesday. Market participants are closely watching the permanent weakening of the euro against the US dollar. In addition, investors are focused on the quarterly reports of the largest European companies.

This image is no longer relevant

Thus, by the time of writing, the composite index of the leading European companies STOXX Europe 600 increased by 0.26% - up to 443.48 points.

Meanwhile, the French CAC 40 gained 0.29%, the German DAX climbed 0.55% and the UK FTSE 100 gained 0.56%.

By the way, in Tuesday's trading, the stock index CAC 40 is close to the highest level since April 21.

Rising and Falling Leaders

German food delivery service Delivery Hero SE soared 6.9%. The day before, the company confirmed its financial targets for 2022 and said it expects a 7% growth in turnover in the next quarter.

Dutch consumer goods and medical equipment maker Royal Philips NV rose 2.7%. News broke on Tuesday that the company had named Roy Jacobs as its new CEO. Jacobs plans to take up duties on October 15.

The market capitalization of British-Australian mining giant BHP Group, Ltd. rose by 4.2%. According to the results of the fiscal year ended in June, the company increased its net profit by a record 26% to $30.9 billion from $11.3 billion a year earlier. The bottom line was BHP's highest earnings since 2011 on the back of rising commodity prices.

Glencore rose 3.77%, British Petroleum 0.66%, ArcelorMittal 1.95% and Rio Tinto PLC 2.43%.

Danish jewelry company Pandora AS fell 7.2% on Tuesday. In April-June, the company reduced its net profit, but increased its revenue and confirmed its full-year forecast.

Swedish retailer Hennes & Mauritz AB slipped 0.2%. The company's products have returned to the Chinese online platform Tmall after a year and a half of absence from the site due to the company's decision to stop purchasing from the Xinjiang Autonomous Region of China.

British fashion chain Ted Baker PLC jumped 16% after US-based Authentic Brands agreed to buy the company in a $254.26 million deal.

What's Going on in the Market Right Now?

The focus of European investors on Tuesday is the losing ground of the euro. Thus, the euro's rate against the US dollar has already fallen by 0.29% - to 1.0131 on Tuesday. The weakening of the euro position provides significant support to the relative income of exporting companies from the euro region.

The main reason for the depreciation of the currency, market analysts call weak macroeconomic statistics from Europe.

It became known on Tuesday morning that the deficit of the foreign trade balance of the eurozone states fell to 24.6 billion euros in June from 26.3 billion, noted in May. At the same time, experts previously predicted a deficit of 20 billion euros.

Meanwhile, the unemployment rate in the UK in April-June amounted to 3.8% amid a more cautious attitude of companies to hiring staff. By the way, the final figure coincided with market forecasts. The number of people employed in the economy over the same period increased by 160,000. Analysts expected an increase of 256,000. At the same time, the number of vacancies in Britain decreased for the first time since mid-2020.

Later on Tuesday, European investors await the release of the August Economic Sentiment Index (ZEW) in Germany. This index will be the subject of careful analysis by market participants in order to look for signs of a decline in confidence in the German economy.

Trading Results the Day Before

Last Monday, European stock indicators showed a moderate rise amid corporate news. In addition, market participants analyzed the latest information from China on the reduction of the key rate by the central bank amid weak data on the country's economy.

As a result, the composite index of leading European companies STOXX Europe 600 increased by 0.34% to 442.35 points. The highest results among the components of the index were shown by the securities of the low-cost airline Wizz Air Holdings PLC, which rose in price by 7.5%.

Meanwhile, the French CAC 40 rose 0.25%, the German DAX gained 0.15% and the UK FTSE 100 climbed 0.11%.

The value of securities of the British-Swedish pharmaceutical company AstraZeneca PLC rose by 2.3%. Managers of the drug manufacturer reported that the anti-cancer drug Enhertu, developed jointly with the Japanese Daiichi Sankyo, slowed the progression of a form of breast cancer in patients. This announcement by AstraZeneca management raised the prospects for new approvals from healthcare regulators.

The market capitalization of German food delivery service and food kits HelloFresh soared 2.7%. The company reiterated its full-year guidance and said it expects revenue growth of 18% to 23%.

Quotes of the German consumer goods company Henkel AG & Co. St increased by 1%. The day before, it reported that in the first quarter of fiscal 2022, it increased sales by 8.9%, but reduced profits amid rising prices for raw materials and transportation.

The share price of the British consulting company TP Group PLC increased by 2.9%. On Monday, it released audited financials for last year, showing its pre-tax loss rose to $9.7 million year-on-year.

The value of securities of the Dutch aircraft manufacturer Airbus SE increased by 0.4% due to the news of the purchase of 20 A330-900 aircraft from it by the Malaysian company Malaysia Aviation Group.

The market capitalization of Scandinavian air carrier SAS AB soared 6.7%. It previously received a $700 million loan from the American investment company Apollo Global Management, Inc. as part of the restructuring plan.

On Monday morning, Chinese media reported that the People's Bank of China injected about $60 billion into the country's financial system as part of the medium-term lending program (MLF).

In addition, the central bank reduced the interest rate on loans for a year, issued under the MLF, by 10 basis points - to 2.75% from 2.85%. Traditionally, the rate cut signals a slowdown in the Chinese economy in the past month.

Analysts say the world's second-largest economy has yet to recover from the damage caused by severe coronavirus restrictions.

Thus, in July, the indicator of the country's industrial production increased by 3.8% in annual terms compared to 3.9% in June. At the same time, economists predicted growth of 4.6%.

Retail sales in China rose 2.7% from a year earlier. At the same time, experts predicted an increase in the indicator by 5%.

European stock market participants analyzed data from China with great caution and avoided drastic steps. At the same time, protective assets - securities of European healthcare and telecommunications companies - became the key upward factor for the indices on Monday.

An additional catalyst for the growth of European stock markets was also macroeconomic statistics for the region. Thus, in April-June 2022, the Danish economy grew stronger than the market predicted - by 0.7% compared to January-March.

Meanwhile, the growth of wholesale prices in Germany in the past month decreased to 19.5% in annual terms after the growth of 21.2% in June. On a monthly basis, prices decreased by 0.4%.

Irina Maksimova,
ผู้เชี่ยวชาญด้านการวิเคราะห์ของ InstaForex
© 2007-2022

บทวิเคราะห์ของทาง InstaForex จะทำให้คุณทราบถึงแนวโน้มของตลาด! ในการที่เป็นลูกค้าของทาง InstaForex นั้นคุณจะได้รับการบริการเพื่อการซื้อขายอย่างเต็มประสิทธิภาพอย่างมากมาย

  • เทรดให้ดีแล้วคว้ารางวัล
    เติมเงินในบัญชีของคุณอย่างน้อย $500 สมัครเข้าร่วมการแข่งขัน และลุ้นรับรางวัลอุปกรณ์ติดต่อสื่อสารแบบพกพา
  • เฟอร์รารีจาก InstaForex
    เติมเงินในบัญชีของคุณอย่างน้อย $1,000
    F8 Tributo
  • Chancy Deposit
    ฝากเงินเข้าบัญชีของคุณด้วย $3,000 และรับรางวัล $1,000
  • โบนัส 100%
    โอกาสพิเศษของคุณในการรับโบนัส 100% จากเงินฝากของคุณ
  • โบนัส 55%
    สมัครรับโบนัส 55% สำหรับการฝากทุกครั้ง
  • โบนัส 30%
    รับโบนัส 30% ทุกครั้งที่คุณเติมเงินในบัญชีของคุณ

Recommended Stories

US stock market closes higher, Dow Jones gains 0.55%

At the close of the New York Stock Exchange, the Dow Jones rose 0.55%, the S&P 500 rose 0.75%, and the NASDAQ Composite rose 1.13%. The leading performer among

Thomas Frank 03:20 2022-12-09 UTC+2

Stock Asia shows mainly a decline to 1%

The stock market in Asia is down 1%. The Hong Kong Hang Seng Index was the exception, rising 3.38%. The least-losing indicators were the Shanghai Shanghai Composite and Shenzhen Shenzhen

16:00 2022-12-08 UTC+2

EUR/USD. The Fed to set the stage for longer drop in USD in 2023

The euro seems to leave its lows behind. What does the EU currency await next year? In 2022, the energy crisis affected the EUR/USD pair significantly. It triggered the strongest

Anna Zotova 14:24 2022-12-08 UTC+2

Pound sterling holds at its peak, but can it stay there?

The pound sterling has managed to reach a six month high with considerable effort. However, analysts say it is not the time to celebrate, as GBP may begin sliding down

Larisa Kolesnikova 09:06 2022-12-08 UTC+2

The US stock market closed mixed, Dow Jones did not rise in price

The US stock market ended Wednesday's trading in different directions due to the strengthening of the health care, telecommunications and industrial sectors. The market demonstrates against the backdrop of negative

Thomas Frank 03:01 2022-12-08 UTC+2

Will the dollar still be at war? USD/JPY forecast for 2023

The USD/JPY pair plummeted in November, which made many question its bullish potential. However, the dollar's recent growth convinces investors otherwise. So what to expect from the major? The greenback

Аlena Ivannitskaya 09:01 2022-12-07 UTC+2

US stock market closed lower, Dow Jones down 1.03%

At the close in the New York Stock Exchange, the Dow Jones fell 1.03%, the S&P 500 fell 1.44%, and the NASDAQ Composite fell 2.00%. UnitedHealth Group Incorporated

Thomas Frank 02:55 2022-12-07 UTC+2

European stocks closed lower while waiting for decisive steps from the world's central banks

European markets closed lower on Tuesday, with global sentiment subdued investors weigh future policy from global central banks. Tech and health care stocks led losses. The pan-European Stoxx 600 closed

Irina Maksimova 22:44 2022-12-06 UTC+2

EUR/USD: although the euro has ambitious plans, it is too early to write off the dollar

The greenback posted its strongest gain in two weeks on Monday. The USD index ended Monday's session by rising 0.7% to 105.30 points. Meanwhile, EUR/USD came under pressure amid renewed

Viktor Isakov 22:44 2022-12-06 UTC+2

GBP/USD. The pound is up on the wing. Santa Claus rally will take it to the sky

The stock market is lower and the pound falls against the dollar at the beginning of the week. These dynamics once again confirm that the British currency depends

Anna Zotova 22:43 2022-12-06 UTC+2
ระบุคำถามไว้ได้ใน แชท.