The German DAX rebounded from early losses and closed slightly above the flatline at 18,931, enough to extend the last session’s record-high close as investors continued to digest the magnitude of rate cuts expected by central banks this year and their impact on corporate returns. Tech and financial companies led the gains as hopes of robust results in this week’s ISM PMIs and jobs report in the US may raise the probability of a soft landing for the US economy, aiding the risk sentiment in Europe. SAP added over 1%, while Munich Re advanced 1.3%. Also, Volkswagen reversed early losses and closed 1.4% higher, sharply outperforming losses for other auto manufacturers after announcing new cost-cutting measures and that it cannot rule out plant closures in Germany. On the data front, both the Eurozone’s and the domestic manufacturing PMIs were revised slightly higher from their preliminary estimates in August, but continued to point to continued contractions in the factory activity.
The FTSE 100 ended about 0.2% down at 8636.8 on Monday, the first trading day of September. On the domestic macro front, a survey released earlier confirmed that UK manufacturing activity grew at its fastest pace in more than two years in August. Among single stocks, Rightmove was in focus, surging nearly 30% after Australia’s REA Group confirmed it is mulling a bid approach. Barratt Developments gained 3.1% ahead of its results later this week and after UBS upgraded shares of the housebuilder to ‘buy’ from ‘neutral’ and lifted the price target to 630p from 610p. On the downside, miners and defence stocks were the biggest laggards.
The CAC 40 traded around the flatline at 7,661 on Tuesday, as traders navigated a tepid start. Domestically, France's budget deficit improved, narrowing to EUR 156.91 billion from January to July 2024, compared to EUR 168.99 billion in the same period last year. Among individual stocks, Teleperformance led the gainers with a 2.3% rise, while luxury giants LVMH, Kering, and Hermès posted gains of 1.2%, 1%, and 1.1%, respectively. On the downside, Unibail-Rodamco-Westfield was the biggest decliner, slipping 1%, followed by Renault, ArcelorMittal, and Sanofi, which fell between 0.8% and 0.9%.
The FTSE MIB edged 0.15% lower to close at 34,320 on Monday, in line with its European peers. In economic data, the HCOB Italy Manufacturing PMI improved to 49.4 in August 2024, up from 47.4 in July and surpassing expectations of 48.5. Additionally, Italy's GDP was confirmed to grow by 0.9% year-on-year in the second quarter of 2024, marking its strongest growth in five quarters and an acceleration from the previous quarter's 0.7% rise. In corporate news, Leonardo fell over 7% after weak Chinese PMI data underscored a downturn in demand for the auto sector. Diasorin (-2.9%) and Telecom Italia (-1.7%) were also among the top decliners.
The IBEX 35 closed flat on Monday at 11,400 after ending last week at a 3-month high as investors continued to weigh the economic outlook for insights into future credit costs. Leading Spanish stocks had a mixed performance, with Inditex down 0.7% and Santander, BBVA, Caixabank, Amadeus, and Cellnex each dropping 0.4%. In contrast, Iberdrola and Ferrovial gained 0.4%, while Telefonica rose 1.5%. Inmobiliaria was a standout performer, climbing 2.9%, whereas Fluidra was among the worst performers, declining 1.7%
