After opening slightly higher, Paris ended with a decline of 1.20%, London of 1.07% and Frankfurt of 1.26%. In Zurich, the SMI drops 1.29%.
Share prices in global markets fell once more on Wednesday as investors once more worried regarding the economic outlook following disappointing corporate results, underscoring the difficult backdrop with high inflation.
Wall Street was down sharply following a good start to the week. The Nasdaq lost 3.31%, the S&P 500 2.83% and the Dow Jones 1.41% around 3:55 p.m. GMT.
This dragged the European markets: following opening slightly higher, Paris fell by 1.20%, London by 1.07% and Frankfurt by 1.26%. In Zurich, the SMI lost 1.29%.
After a rebound on Tuesday, investor sentiment turned around, with corporate publications showing the impact of inflation on their accounts.
The spectacular fall in the action of Target supermarkets on Wall Street (-24.61%) – a rare amplitude of depreciation in the distribution sector – held all the attention of investors because it showed how much the rise in prices is beginning to weigh on consumption and corporate profits.
In the euro zone, inflation stabilized at 7.4% over one year in April, a level which remains well above the 2% target of the European Central Bank (ECB). In the United Kingdom, it jumped to 9% in April over twelve months, a record in 40 years.
In the United States, the president of the American central bank Jerome Powell recalled Tuesday that his institution will have to act in a “more aggressive” way if American inflation does not decelerate quickly enough.
“With the U.S. Federal Reserve now targeting a soft landing that looks a lot like the pre-recession stage, it may be time to buckle up and brace for a very bumpy year,” warned analyst Craig Erlam. ‘Oanda.
The Federal Reserve (Fed) began in March to raise its key rates in order to slow down inflation, which is at its highest in 40 years in the United States. Further hikes should be decided at the next two Fed meetings, in mid-June and at the end of July.
Distribution in trouble
In addition to Target, the Lowe’s store chain, specializing in home furnishings, was sanctioned by investors (-4.80%), following also announcing mixed results with a decline in quarterly sales of 3%.
In London, Ocado plunged 9.05%, Tesco lost 4.38%, Marks & Spencer 4.20%, JD Sports 5.42%.
In France, Carrefour was also the largest drop in the CAC 40 index (-4.42%).
Takeover intention at Siemens Energy
The German group Siemens Energy announced on Wednesday its intention to buy back all the missing shares of its problem subsidiary Siemens Gamesa (+ 12.81%), a wind power specialist, with a view to withdrawing it from the stock market. Siemens Energy shares rose 1.16%.
Other stocks in the sector also rose, such as EON (+1.78%), RWE (+3.15%) and Engie (+0.91%).
The dollar remains strong
Doubts regarding global growth affected oil, which tipped into the red. Around 3:30 p.m. GMT, a barrel of Brent from the North Sea for delivery in July fell 1.71% to 110.03 dollars.
The barrel of American West Texas Intermediate (WTI) for delivery in June climbed 1.68% to 110.52 dollars.
The US dollar was on the rise once more on Wednesday on market risk aversion, with the British pound particularly suffering following jumping the day before. Around 1:30 p.m. GMT, the pound lost 0.73% to 1.2402 dollars.
The euro crumbled 0.40% to 1.0507 dollars.
Bitcoin lost 3.88% to $28,920.
