A trader works at the Frankfurt stock exchange
by Laetitia Volga
PARIS (Archyde.com) – The main European stock markets are expected to be in the red at the opening on Friday, at the end of an unfavorable year for global equities with in particular the monetary tightening of the major central banks.
The first indications available indicate a drop of 0.53% for the Paris CAC 40, 0.41% for the Dax in Frankfurt, 0.27% for the FTSE in London and 0.47% for the EuroStoxx 50 UK markets will close at 1.30pm GMT.
The time will probably not be for risk-taking for the last session of 2022. Investors have wondered in recent days regarding the consequences for the markets of China’s abandonment of its “zero-COVID” policy.
On the one hand, the resumption of travel might give a boost to the global economy, but also spread the coronavirus beyond China’s borders. On the other hand, investors fear that increased demand from China will drive up commodity prices, prompting central banks to raise interest rates further to stem inflation.
The struggle of issuing institutions once morest rising prices has been at the heart of market news throughout the year and should remain so in 2023, as well as the probable onset of a recession and geopolitical tensions .
European markets should end the year with negative performances: the CAC 40 is currently down 8.1%, the Dax 11.41% and the European Stoxx 600 index 11.78%, their worst performance since 2018.
The MSCI global stock index is expected to do worse with an annual fall of around 20%, not seen since the 2008 financial crisis.
The Footsie, on the other hand, should stand out with a positive performance over the year as a whole, the flagship London index having benefited from its exposure to commodity prices, which have increased with the war in Ukraine.
VALUES TO FOLLOW:
A WALL STREET
The New York Stock Exchange ended higher on Thursday, driven by a rebound in growth stocks thanks to the relaxation of bond yields and the good reception reserved for the indicator of weekly jobless claims.
The slightly higher enrollment figures supported the idea that the Federal Reserve’s monetary tightening was paying off, easing concerns regarding future rate hikes.
The Dow Jones Index gained 345.09 points, or 1.05%, to 33,220.8 points, the S&P 500 rose 66.06 points, or 1.75%, to 3,849.28 and the Nasdaq Composite rose. climbed 264.80 points, or 2.59%, to 10,478.09.
The volume of transactions was relatively low with 8.78 billion shares traded, once morest an average of 10.95 billion over the last twenty sessions.
IN ASIA
In Tokyo, the Nikkei erased its gains at the end of the session to end up perfectly balanced. Japanese markets will not reopen until Wednesday following a break for the New Year festivities.
In China, the time has also come for the rebound of the main equity indices, with investors focusing on the positive points expected in 2023, such as Beijing’s support for growth and the reopening of the country despite the uncertainties on the evolution of the health situation related to COVID-19.
Banks Citi, Bank of America and JPMorgan have raised their recommendations on Chinese stocks recently, expecting an economic recovery next year.
Mainland China’s large-cap CSI 300 index gains 0.7% and Shanghai’s SSE Composite 0.71%
EXCHANGES/RATES
With risk appetite diminishing, the dollar gained 0.17% once morest a basket of benchmark currencies. The euro thus fell to 1.0644, down -0.16%.
Variations are limited on the US bond market where the ten-year yield is unchanged at 3.8369%.
OIL
Oil prices are rising slightly, on track for a second consecutive year of increases due to reduced supply with the war in Ukraine, the strength of the dollar and weak demand from China.
Brent rose 0.61% to 83.97 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.68% to 78.93 dollars.
The first is currently showing an annual gain of 7.6%, following jumping 50.2% in 2021, and the second 4.5% in 2022, following a 55% increase last year.
(Laetitia Volga, edited by Matthieu Protard)
