FTSE 100 Falls; DAX Rises on Tech Gains Despite Economic Worries

The FTSE 100 finished lower after a volatile session, as the value of the pound fell. London’s top index fell 40.01 points, or 0.48%, to 8,318.24 at the close of trading.

Domestic-focused companies, such as housebuilders and retailers, fared poorly in the equities markets.

However, a rise in oil and metal prices aided a stronger session for commodities equities, with metal major Ferrexpo outperforming as gold and silver prices jumped.

Mining stocks such as Fresnillo (FRES.L), Glencore (GLEN.L), and Antofagasta (ANTO.L) led the FTSE higher in early trading, boosted by news of Chinese rate cuts. Strong business activity in China tends to drive up the stock prices of raw material suppliers.

China’s central bank today cut the market-based benchmark lending rate to lower the one-year loan prime rate by 25 basis points to 3.10%. The five-year LPR was also trimmed to 3.6% from 3.85%. pic.twitter.com/wQAFbl7ZYO

— Yicai 第一财经 (@yicaichina) October 21, 2024

Despite a new record for gold and silver prices, which have not been seen in over a decade, a 4.2% rise by Fresnillo PLC (LSE: FRES) couldn’t reverse losses from a series of blue caps in London on Monday.

FTSE 100 Set for Further Decline as Investors Eye Intercontinental Hotels Updates

Futures showed London’s blue chips plunging another 40 points to 8,326 ahead of Tuesday’s open, following a 40-point drop Monday.

On Tuesday, investors set to focus on a trading update from Holiday Inn owner Intercontinental Hotels Group PLC (LSE: IHG) as well as public borrowing numbers.

Holiday Inn owner IHG's room revenue grows 1.5% on firm European summer demand https://t.co/ry4pwkpRIB pic.twitter.com/NKWrhQFqFP

— Reuters Business (@ReutersBiz) October 22, 2024

DAX Drops 1% Amid Earnings Concerns; Insurance and Tech Stocks Lead Losses

On Monday, October 21, the DAX fell by 1%, erasing the previous session’s 0.38% gain, to close at 19,461.

Investor uncertainty ahead of earnings results, as well as sentiment towards the Fed’s rate path, dampened demand for DAX equities.

On Monday, Munich Re Group fell 2.95% after Jefferies downgraded its stock to hold. The downgrading had an influence on the broader insurance market, with Hannover Re plunging 1.75%.

Tech stocks also fell as investors waited for chipmaker SAP to disclose its earnings. SAP and Infineon Technologies both had decreases of 0.99% and 2.57%.

"SAP will be a foundational player in the AI market," says @DivesTech to @FrankCNBC. "SAP’s earnings are a huge barometer for hyper-scalers like Amazon and Google." pic.twitter.com/kdXXuRnezN

— Worldwide Exchange (@CNBCWEX) October 21, 2024

Deutsche Bank is also under selling pressure as investors awaited its earnings results, falling 0.56%. Commerzbank closed the session lower by 1.69%.

German Producer Prices Reflect Weakening Demand

Germany’s producer prices fell by 1.4% year on year in September, following a 0.8% drop in August. The steeper reduction in producer prices signalled a deteriorating demand environment, which might reduce inflationary pressures.

Furthermore, September’s results showed poor demand, consistent with forecasts of a German economic slump in 2024.

Germany’s DAX Gains Boosted by Tech Stock Surge

As the trading session began on Tuesday, Germany’s DAX was up 0.5%, while technology stocks rose 1.7%. Both were aided by Frankfurt-listed software behemoth SAP, which soared more than 5% to a new high after lifting revenue guidance on solid cloud business growth.

$SAP Earnings:

– Total revenue was up 9% to €8.47 billion and up 10% at constant currencies.
– Software licenses revenue decreased by 15% to €0.28 billion and was down 14% at constant currencies.
– Cloud and software revenue was up 11% to €7.43 billion and up 12% at constant… pic.twitter.com/iBI6kNRIXn

— AlphaSense (@AlphaSenseInc) October 21, 2024

Maersk, regarded as a barometer of global trade, raised its full-year profitability projection, citing robust container demand. Shares opened 3.3% higher before reversing course and falling 0.66% below the flat line.

Utilities and chemicals were the worst-performing industries, declining by 0.8% and 0.6%, respectively.