2023-06-20 16:41:21
Paris drops 0.27%, Frankfurt 0.55% and London 0.25%. In Zurich, the SMI yields 0.80%.
European stock markets closed lower on Tuesday, like the day before and following several weeks of gains, disappointed by the magnitude deemed insufficient of the measures of the Chinese central bank to stimulate the country’s economic recovery.
Wall Street was trading in negative territory on Tuesday, continuing the consolidation that began on Friday following several weeks of gains, amid end-of-quarter moves. Around 4:00 p.m. GMT, the Dow Jones yielded 0.91%, the Nasdaq index 0.67% and the broader S&P 500 index returned 0.71%.
“We had a series of increases thanks to the hope of seeing the Fed (American central bank) take a break (in the policy of raising its rates, Ed.), which happened”, comments Adam Sarhan , of 50 Park Investments.
“But we went too far, too fast,” said the manager. “It’s not normal to see the Nasdaq go up eight weeks in a row. The market is therefore ripe for a correction. The question is to know how big and how long” will it be, continues Adam Sarhan.
In a similar dynamic, in Europe, the financial centers ended down: Paris dropped 0.27%, Frankfurt 0.55% and London 0.25%. In Zurich, the SMI lost 0.80%.
“Today we are between two waters”, on the one hand, the markets “digest the decisions of the central banks of the last week”, on the other, they “await the publication of the PMI indicators at the end of the week” for the euro zone, comments Florian Roger, head of investment strategy at BNP Paribas CIB.
“Until then, the cash reserves of companies differ” still the effects of rate hikes led by monetary institutions, the effect of which is to slow the economy by fighting once morest inflation, “but we come to a point where these reserves come to an end”, continues the analyst.
In this context, the PMI index of activity in the services sector “will be important for the economic outlook for the second half of the year”, he adds.
Investors had high hopes for China’s stimulus following several disappointing economic data, but they weren’t completely satisfied.
China’s central bank cut two benchmark rates on Tuesday, following several similar moves in recent weeks, to encourage commercial banks to extend more credit at better rates.
Closely followed by the markets, these two rates are now at their historic lows, but greater declines were hoped for by investors.
After rising for several days, long-term 10-year bond rates eased slightly in both Europe and the United States.
The yield on 10-year US government bonds stood at 3.71%, once morest 3.76% on Friday at the close. The interest rate of the German loan at the same maturity was at 2.40% once morest 2.51 and the French at 2.92% once morest 3.02%.
News from China added to the gloom in European trading.
UBS faces heavy fines
With the takeover of Credit Suisse, UBS (-2.38% in Zurich) risks having to pay heavy fines of “several million dollars” in the Archegos file, according to the Financial Times, which says the bank has contacted the authorities. of regulation.
Covestro liquefies
In Frankfurt, Covestro ended up 12.90% following reports from Bloomberg of a potential takeover of Covestro by the Emirati national oil company ADNOC.
The action was down more than 5% in the morning, in the wake of the warning on the results of the chemist Lanxess (-15.39%).
Asked by AFP, Covestro did not want to “comment on market rumours”.
On the side of oil and raw materials
Oil prices turned around following being pushed earlier in the session by China’s benchmark interest rate cut, though tempered by concerns over the country’s growth.
The American WTI barrel dropped 2.24% to 70.17 dollars and the Brent barrel 0.98% to 75.34 dollars around 3:55 p.m. GMT.
The euro dropped 0.15% to 1.0904 dollars.
Bitcoin took 1.30% to 27,067 dollars.
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