European stock markets were in the red on Monday, weighed down by passable economic indicators, while the rest of the markets are on the defensive ahead of the monetary policy meeting of the American central bank (Fed).
Around 10:30 GMT, Paris fell by 1.37%, Frankfurt by 0.63% and Milan by 0.93%. The European reference index, the Eurostoxx 50, yielded 1.54%. In Switzerland, the flagship SMI index dropped 0.83%.
London is closed due to a public holiday, as are Hong Kong and Shanghai, which reduces volumes and exacerbates variations.
The European stock markets experienced a sudden and spontaneous fall a little earlier just before 08:00 GMT. The Paris CAC 40 index sank by 3.4%, the Eurostoxx 50 by 2.9% and in Stockholm the OMX 30 index even fell by 8%, according to Bloomberg, which claims that the operator in charge of the Swedish place examines this movement.
The reason for these variations is unclear to some analysts, who even speak on Twitter of a ‘flash crack’.
For Andrea Tuéni, an analyst at Saxo Bank, the publication of growth in the manufacturing sector at its lowest since January 2021 in the euro zone in April (S&P Global PMI Composite index) is the only notable indicator for the markets on Monday.
The report ‘highlighted tensions on supplies’, in particular due to the confinements in China, and the clouded outlook for demand which shows that ‘the manufacturing sector in the eurozone will go through a somewhat complicated period’, indicates- he told AFP.
Andrea Tuéni adds that ‘these figures echo those published in China’: manufacturing activity there fell in April to its lowest level since February 2020 due to the confinements of the country’s major cities.
Sanitary measures are not easing and, in Beijing, the authorities announced on Saturday to strengthen them by making new tests compulsory to access certain public places.
Tokyo ended down 0.11%, on hold ahead of the Fed meeting, before closing three days for ‘Golden Week’ in Japan.
However, Monday morning’s movement is to be seen in a context of high volatility which has been driving the markets for several weeks, with stock indices reacting strongly to the slightest news concerning the situation in China, inflation, the geopolitical context and monetary policies. .
On Friday, the New York Stock Exchange recorded severe losses. The Nasdaq notably tumbled more than 4% — and more than 13% in April — its worst fall since 2008, while the S&P 500 and the Dow Jones had their worst month since March 2020. Their futures showed all three indexes up slightly ahead of the open.
Oil prices were affected by fears over Chinese demand and by the 6th sanctions package prepared by the European Commission once morest Russia’s oil ecosystem.
Around 10:25 GMT, a barrel of Brent from the North Sea for delivery in July, which is the first day of trading as a benchmark contract, was down 2.59% to 104.37 dollars.
The barrel of American West Texas Intermediate (WTI) for delivery in June lost 2.95% to 101.61 dollars.
Investors also have the Fed’s Tuesday-Wednesday monetary policy meeting in mind.
After a 0.25 percentage point increase in its key rates in March, the Fed will ratify this time, except surprise, an increase of half a percentage point and should also mark the start of the reduction of its balance sheet , to try to fight once morest inflation at its highest in 40 years in the United States.
Auto and tech penalized
Sectors dependent on economic growth fell on Monday, such as the automobile industry, with Stellantis losing 2.14%, Renault 1.38% and BMW 1.08%.
The technology sector was down on the back of rising borrowing rates. STMicroelectronics yielded 3.22%, Dassault Systèmes 2.19% and Infineon 2.46%.
On the side of the euro and bitcoin
The euro lost 0.21% to 1.0523 dollars, a historically low level.
Bitcoin gained 1.23% to $38,790.
/ATS