Paris and London fell by 2.01% and 1.88% respectively, driven down in particular by luxury and raw materials, when Frankfurt dropped 1.54% and Milan 1.53% at the close.
The fear of a massive containment in China, coupled with the still present concerns regarding the expected turn of the screw on the part of the American central bank, weighed down the world stock markets on Monday.
In Europe, Paris and London fell by 2.01% and 1.88% respectively, driven down in particular by luxury and raw materials, when Frankfurt lost 1.54% at the close and Milan 1.53% . In Zurich, the SMI lost 1.41%.
Already down last week, the three main indices of the New York Stock Exchange did not rebound: the S&P 500 fell Monday around 2:15 p.m. GMT by 1.15%, the Dow Jones by 0.92% and the Nasdaq by 0.38 %.
Markets fear in particular that the new cases of COVID-19 reported in Beijing might push the Chinese authorities to strictly confine the capital, as is already the case in Shanghai, disrupting supply chains.
Taking advantage of its safe haven status, the US dollar rose once morest several major currencies, including the euro (+0.82%) and the pound (+0.93%).
The aggressive attitude of the Federal Reserve (Fed) vis-à-vis inflation worries the markets, which fear the consequences on growth. Its president Jerome Powell indicated Thursday that an increase in key rates by half a percentage point “was on the table” for the next monetary meeting in early May, which is “hesitating the markets”, according to Yohan Salleron, equity manager at Mandarine Gestion.
“We are really watching all the different indicators to find out what the extent of the deceleration will be, because raising rates in a context of slowing growth can start to worry the markets a little,” said he indicated.
Commodities strongly affected
Oil and metals markets were falling, with the prospect of limited demand in China, the world’s largest importer of raw materials.
At 2:00 p.m. GMT, a barrel of Brent from the North Sea for delivery in June plunged 6.31% to 99.94 dollars. The barrel of American West Texas Intermediate (WTI) for delivery the same month yielded 6.57% to 95.39 dollars.
In their wake, oil stocks tumbled and ended up at the bottom of the main European indices. At the close of trading, BP was down 6.18%, Shell by 5.19% and TotalEnergies by 4.01%. The American Exxon Mobil fell 6.21% on Wall Street.
Metals were also affected, as were mining stocks: ArcelorMittal fell sharply by 8.84%, when Anglo American fell by 6.85%, Glencore by 5.64% and Rio Tinto by 5.16%.
Twitter is considering Musk’s proposal
Twitter is reviewing the purchase proposal made by Elon Musk, and discussions took place on Sunday between the two camps, following the boss of Tesla said Thursday that he had secured the sum necessary for this transaction, according to the Wall Street Journal.
Twitter action has risen around 4% since the opening of Wall Street.
Luxury takes a hit
Fears regarding activity in China never bode well for the luxury sector, which is highly dependent on this market.
Burberry, which is particularly popular in China, fell sharply on Monday (-4.68%), following Hong Kong-listed Prada fell 5.05%.
Richemont ended down 6.18%, when Moncler lost 4.68%, Kering 4.35%, Hermes 3.91% and LVMH 3.75%.
Banks evolve in the red
European banking stocks mostly ended in the red on Monday, with Commerzbank losing 6.79%, Deutsche Bank 5.73%, HSBC 4.15% and Societe Generale 2.41%.
The banks find themselves caught in a vice between “an upcoming rate hike which would be favorable to them” and “fears of a slowdown in growth”, according to Yohan Salleron, and it is this time the rates which have won.
