EUROPEAN STOCK MARKETS END SHARPLY LOWER
by Claude Chendjou
PARIS (Archyde.com) – European stock markets ended sharply lower on Tuesday and Wall Street was also trading in the red at mid-session amid continued Russian bombardment of Ukraine as Moscow flouts Western sanctions.
In Paris, the CAC 40 ended down 3.94% at 6,396.49 points. The British Footsie fell by 1.72% and the German Dax by 3.85%.
The EuroStoxx 50 index fell 4.04%, the FTSEurofirst 300 2.07% and the Stoxx 600 2.37%.
Russia intensified its bombardment of Ukraine on Tuesday and a column of Russian armor was heading towards Kiev, on the sixth day of the Russian offensive, which left at least 136 civilians dead and nearly 400 wounded, according to a report. compiled by the Office of the United Nations High Commissioner for Human Rights.
Despite the heavy international sanctions, Moscow assured Tuesday that it wanted to continue its operations until it achieved its objectives.
“Russia’s advance towards the capital of Ukraine continues to weigh on investor sentiment,” said Peter Cardillo, economist at Spartan Capital Securities, noting that the market is currently focused on the economic consequences of the war. .
A sign of market nervousness, the index measuring volatility in the United States took nearly 12%, while its European equivalent jumped 17.8%.
VALUES IN EUROPE
In Europe, the banking segment (-6.7%) was doubly penalized by its exposure to Russia and by the decline in bond yields due to lower interest rate expectations.
In Paris, Crédit Agricole fell by 7.7%, Société Générale by 9.3% and BNP Paribas by 6.8%. In Milan, Intesa Sanpaolo dropped 7.7% and in Amsterdam, ING plunged 10.7%.
Conversely, Defense groups were once more sought following, such as Thales (+5.1%), the British BAE Systems (+3.6%) or even the German Rheinmetall (+17, 2%).
In corporate results, Atos fell 20.3% following disappointing forecasts and the announcement of the departure of its chief financial officer, Uwe Stelter.
The outlook for fashion group Zalando (-9.6%) and food delivery specialist to make a meal HelloFresh (-7.7%) also disappointed.
Bayer (+0.8%) was however supported by its forecast of a return to growth in adjusted profit this year.
A WALL STREET
At the time of the close in Europe, the Dow Jones fell 2%, the Standard & Poor’s 500 1.5% and the Nasdaq 1.3%
Ten of the eleven major sectors of the S&P-500 are in the red, with financials (-3.8%) showing the biggest decline and energy (+0.6%) the biggest gain.
In values, the banking compartment (-4.8%) and Citigroup (-1.3%) ebbed in the wake of falling bond yields.
Oil groups, such as Chevron (+2.6%), on the other hand, are benefiting from fears of a tightening of supply, with Brent at more than 105 dollars a barrel.
On the quarterly results side, the distributor Target jumped 11.7% thanks to its annual forecasts above expectations, while Zoom Video Communications plunged 5.3% due to its outlook.
THE INDICATORS OF THE DAY
Eurozone manufacturing growth momentum deteriorated slightly in February, with the index down to 58.2, but activity remains buoyant and supply chain constraints are easing, survey shows from IHS Markit, even as prices continue to rise.
In fact, the rise in prices in Germany continued in February (+5.5% over one year) and slightly exceeded expectations, according to the first estimate of inflation published by Destatis, the Federal Office for statistical.
In the United States, the growth of manufacturing activity accelerated more than expected in February, to 58.6, in the context of a drop in cases of contamination linked to COVID-19, shows the monthly survey of the Institute for Supply Management (ISM) released on Tuesday.
CHANGES
At foreign exchange, the dollar, a safe haven, continues to appreciate once morest a basket of major currencies, gaining 0.72%.
The Swiss franc and the yen are also rising once morest the euro, with the Swiss currency having peaked since 2015 once morest the single European currency at 1.0248
The euro, down 1.03%, is trading at 1.1104 dollars.
The ruble is trading at 112 to the dollar, helped by the intervention of the Russian central bank, but it is still down almost 30% from its highest level since the start of the year.
RATE
The intensification of the Russian offensive is weighing on bond yields, leading money markets to revise interest rate expectations downwards.
The yield on ten-year US government bonds fell 13 basis points to 1.71%, to a five-week low, while the two-year, the most sensitive to changes in the cost of credit, fell more than 14 points to 1.316%, bringing the yield spread between the two bonds to less than 40 points.
The ten-year German Bund yield ended down 22.5 points at -0.069%, falling back into negative territory for the first time since February 1.
Its French equivalent contracted more than 25 points to 0.377%.
OIL
Oil prices rose sharply despite the decision by members of the International Energy Agency (IEA) to release 60 million barrels of oil from their reserves to stabilize the market.
Brent crude jumped 7.8% to 105.48 dollars a barrel and US light crude (West Texas Intermediate, WTI) 8.36% to 103.76 dollars.
TO BE FOLLOWED ON WEDNESDAY:
Hearing at 3:00 p.m. GMT of Jerome Powell, Chairman of the Fed, by the Financial Services Committee of the House of Representatives.
(Some data may show a slight shift)
(Report Claude Chendjou, edited by Sophie Louet)
