Euromarkets: ‘Football’ in August with modest gains

LAST UPDATE: 11.25

With restrained movements on positive ground, the European stock markets enter August, with the investment mood maintaining a positive momentum after the strong gains shown by the Euro markets on Friday and also in July as a whole, which recorded its best monthly performance since November 2020 with “jump” 6.3%.

Investors continue to weigh the barrage of corporate results as well as macro figures announced in Europe. After last week’s Eurostat data showed the Eurozone economy continued to grow in the second quarter of 2022, despite intense pressure from the energy crisis and a rally in inflation, it was announced today that manufacturing activity in the eurozone shrank in July; with factories forced to stockpile unsold goods due to weak demand, fueling concerns that the euro zone could slip into recession.

In particular, the S&P manufacturing PMI fell to 49.8 points in July from 52.1 points in June, marginally higher than initial estimates of 49.6 points, but for the first time below the 50 point mark that separates the growth from contraction, from June 2020.

The manufacturing index, considered a good indicator of economic health, fell to a more than two-year low of 46.3, down from 49.3 in June.

It is noted that according to Eurostat in the second quarter the GDP of the Eurozone increased by 0.7% compared to the previous one, while according to the initial estimate the annual inflation is expected to climb to 8.9% in July from 8.6% in June.

In the field of results, HSBC Holdings reported better-than-expected earningswhile pledging to restore paying quarterly dividends next year as it tries to stave off calls by its largest shareholder for a break-up.

In addition, Heineken announced higher than expected first half profitsas consumers bought more beer despite inflationary pressures, but the world’s second-biggest brewer cut its margin target in 2023 as costs rose.

In this climate, The pan-European index Stoxx 600 adds 0.25% to 439 points, finding support in banks which add 2%, while the health sector is down 0.5%.

In the individual boards, the German DAX strengthens by 0.34% to 13,530 units, the French CAC 40 gains 0.42% at 6,475 points, while the British FTSE 100 gains of 0.5% to 7,460 points.

In the periphery the Italian FTSE MIB and the Spanish registers gains of 0.75% at 22,570 units IBEX 35 adds 0.83% to 8,220 points.

In the individual shares Pearson jumps more than 6.6% to top the Stoxx 600, since the British company announced strong quarterly resultswhile HSBC gains 6%.

At the bottom, Swedish real estate firm SBB is down more than 6% after Goldman Sachs downgraded the stock from “neutral” to “sell.”

Most markets in the Asia-Pacific region moved higher on Monday in the wake of the data for the Chinese factory activity which grew at a slower pace in July, according to a private survey, as the country’s strict coronavirus restrictions eased, or were confined to less economically important areas of the country, lessening the economic impact.