2023-10-04 11:58:04
Paris (awp/afp) – European stock markets are back in the green mid-session on Wednesday, following having lost ground in recent days due to the sharp rise in bond interest rates which have reached levels not seen in more than ten years .
Despite a negative first part of the session, European stock markets regained ground.
Around 11:40 GMT, Paris advanced by 0.41%, Frankfurt by 0.23%. Milan (-0.04%) and London (-0.03%) were stable.
In New York, the futures contracts of the three main indices suggested a slightly higher opening: the Dow Jones gained 0.14%, the Nasdaq 0.11% and the S&P 500 0.15%.
The direction of the stock markets has been dictated by bond interest rates for around ten days and the yield on 10-year American bonds was catapulted to 4.88% on Wednesday at the start of the session, a first in more than 16 years.
Around 11:30 GMT, the American ten-year showed a slight decline, at 4.78% compared to 4.80% at the close on Tuesday.
In Europe, the ten-year German debt rate, which is a benchmark on the Old Continent, exceeded 3% on Wednesday for the first time since July 6, 2011. Around 1:30 p.m. GMT, it stood at 2.94%, once morest 2.97% on Thursday.
“The sharp rise in long-term rates relative to short-term rates suggests that investors believe US interest rates are likely to remain high for longer due to the continued resilience of the US economy,” comments Michael Hewson, CMC Markets analyst.
A strong jobs market worries markets because it is likely to create new inflationary pressures and “the Federal Reserve (Fed) will not only keep interest rates higher for longer, but also be forced to raise them further,” explains Ipek Ozkardeskaya, analyst at Swissquote Bank.
All eyes will therefore be on the United States, where the monthly report on job creation in the private sector for September (ADP/Stanford Lab survey) will be published at 12:15 GMT.
In Asia, Tokyo fell 2.28% and Hong Kong closed down 0.78%.
Novartis without Sandoz
The action of the Swiss laboratory Sandoz was worth 24.88 Swiss francs on the Zurich Stock Exchange around 11:35 GMT, once morest 24 Swiss francs at the opening of the session, defying predictions of a lukewarm reception for its IPO.
Novartis gained 2.12% following the IPO of Sandoz, which allowed it to separate from this subsidiary specializing in generic drugs.
Air France-KLM invests in SAS
Air France-KLM (-0.94% in Paris) announced Tuesday that it had been selected as part of a consortium to acquire up to 19.9% of the troubled Scandinavian airline SAS, an investment of 144.5 million of dollars.
SAS shares fell 83.08% in Stockholm as current shareholders worried regarding losing their investment.
Fall in oil and rise in the euro
Oil prices fall before the holding of a technical meeting of OPEC+ exporting countries.
Around 11:30 GMT, a barrel of Brent from the North Sea, for delivery in December, lost 1.77% to $89.31. Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in November, fell 1.912% to 87.52 dollars.
On the foreign exchange market, the yen traded at 148.900 yen per dollar (-0.08%) following climbing to 150.16 yen on Tuesday.
Japanese Deputy Finance Minister Masato Kanda refused on Wednesday to make any comments on the subject, contenting himself with repeating Japanese doctrine on the subject: excessive fluctuations on the foreign exchange market are not desirable and Tokyo does not rule out any option to deal with it.
For its part, the euro gained 0.40% once morest the dollar to 1.0509 dollars.
Bitcoin was up 0.66% at $27,578.
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