Geopolitical Tensions Impact Stock Market Indices: Market Reviews and Analysis

2023-10-17 14:11:02

In Asia, the Nikkei 225 jumped 1.2% in Tokyo. The Shanghai stock market advanced 0.3% and the Hang Seng added 0.8% in Hong Kong. (Photo: The Canadian Press)

MARKET REVIEWS. The stock markets are trending downward on Tuesday, following a first part of the session with a slight increase for the European indices, investors remaining cautious in the face of ongoing geopolitical tensions in the Middle East.

Stock market indices at 7:30 a.m.

The scholarship of London added 0.3% at the start of the session in Europe. Paris yielded the same percentage and Frankfurt lost 0.5%.

In New York, before the markets opened, the average Dow Jones industrial stocks and the broader index S&P 500 slipped by 0.2%.

In Asia, the Nikkei 225 jumped 1.2% in Tokyo. The scholarship of Shanghai advanced by 0.3% and the Hang Seng added 0.8% in Hong Kong. Sydney a pris 0,5%.

On the New York Commodity Exchange, the price of oil rose 17 US cents to US$86.83 per barrel.

The context

Investors are digesting “diplomatic efforts aimed at preventing a further escalation of geopolitical tensions in the Middle East,” comments Pierre Veyret, analyst at ActivTrades.

“The wait-and-see position continues in most markets,” he continues.

American President Joe Biden will travel to Israel on Wednesday for a “solidarity” visit following the Hamas attack which also aims to unblock the delivery of aid to the Gaza Strip, which has been under siege for more than a week by the Israeli army and where a humanitarian catastrophe is looming according to the WHO.

Joe Biden will also meet the Egyptian president, the king of Jordan and the head of the Palestinian Authority in Jordan, announced US National Security Council spokesperson John Kirby.

However, “the risk of an Israeli offensive remains high and it is quite possible that investor appetite will decline sharply if diplomatic efforts fail,” underlines Ipek Ozkardeskaya, analyst at Swissquote Bank.

On the microeconomic level, corporate results for the third quarter will also keep investors busy; publications from “Goldman Sachs and Bank of America are eagerly awaited, as well as those from health giant Johnson & Johnson,” specifies Pierre Veyret. .

Ericsson in the red

The Swedish telecom equipment giant Ericsson announced a net loss of 30.5 billion crowns (2.6 billion euros) in the third quarter, due to the depreciation in its accounts of the value of the American Vonage, a “cloud” specialist, acquired in 2021 .

Ericsson fell on the Stockholm Stock Exchange (-7.68%).

Lonza forecasts lower sales

The Swiss group Lonza (-11.55% in Zurich), one of the major suppliers to the pharmaceutical industry, unveiled its objectives on Tuesday for the period 2024-2028 and specified that the end of the contract with the American Moderna will weigh on its growth next year. The day before this announcement, Lonza shares had already been heavily disrupted on the stock market following the surprise departure of its general manager.

Edenred on the rise in Paris

The title Edenredthe main player in the meal voucher market, gained 2.98% in Paris, posting the best progression in the index following a notice from the Competition Authority in France published on Tuesday.

The institution judged that capping commissions received by companies issuing meal vouchers is not “the most appropriate response” to “market failures” and recommended “making it compulsory [leur] dematerialization”, a solution announced by the government by 2026.

Raw materials and currencies

Oil prices were up slightly, amid fears of supply disruptions: the price of a barrel of North Sea Brent for delivery in December took 0.47% to US$90.07. The barrel of West Texas Intermediate (WTI) American, expiring in November, advanced 0.38% to US$86.99.

The futures contract of Dutch TTFconsidered the European benchmark, fell by 3.58%, reaching 46.73 euros per megawatt hour (MWh).

The Israeli currency was trading at 3.99 shekels (+0.35%) per US dollar on Tuesday, following falling on Monday to its lowest level in eight and a half years once morest the dollar.

The euro was stable (+0.08%) once morest the US dollar, at US$1.0568 per euro.

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