Global Markets Review: European Markets Open Lower, Asian Markets Mostly Higher - Market Analysis and News

2024-01-15 13:57:43

European markets opened lower on Monday, while Asian markets were mostly higher. (Photo: The Canadian Press)

MARKET REVIEWS. European markets opened lower on Monday, while Asian markets were mostly higher.

US markets will be closed for Martin Luther King Day, a public holiday.

Stock market indices at 7:45 a.m.

Futures contracts Dow Jones posted a decline of -69.00 points (-0.18%) to 37,723.00 points.

Futures contracts S&P 500 dropped -5.25 points (-0.11%) to 4,811.25 points.

Futures contracts Nasdaq posted an increase of +3.00 points (+0.02%) to 16,972.25 points.

In London, the FTSE 100 fell by -19.94 points (-0.26%) to 7,604.99 points.

In Paris, the CAC 40 lost -31.65 points (-0.42%) to 7,433.49 points.

In Frankfurt, the DAX decreased by -44.84 points (-0.27%) to 16,659.72 points.

In Asia, the Nikkei of Tokyo gained +324.68 points (+0.91%) to 35,901.79 points.

For his part, the Hang Seng Hong Kong fell -28.25 points (-0.17%) to 16,216.33 points.

On the oil side, the price of a barrel of American WTI lost -US$1.07 (-1.47%) to US$71.61.

The barrel of Brent of the North Sea decreased by -US$1.06 (-1.35%) to US$77.23.

The context

“With continued uncertainties regarding the outlook for monetary policies in the US and EU, investors are struggling to find reasons to buy the market,” comments Pierre Veyret, analyst at ActivTrades.

Investors hope to see the American Federal Reserve (Fed) and the European Central Bank (ECB) reduce their key rates soon after having raised them sharply and quickly since 2022.

However, Philip Lane, chief economist of the ECB, told the Italian daily Corriera della Serra on Saturday that “too rapid a recalibration” of the ECB’s monetary policy “can prove self-destructive.”

He also “declared that the ECB would have a series of important data by the June meeting to decide on a sequence of rate cuts”, underlines Alexandre Baradez, head of market analysis at IG France, then that the markets have in mind a scenario of lower rates from March, he recalls.

On the bond market, interest rates on European sovereign debt are rising slightly. That of the ten-year German government bond stood at 2.23% around 7:30 a.m. compared to 2.18% on Friday evening.

European markets are also hampered by the publication of a 0.3% decline in German gross domestic product (GDP) in 2023, a “turbulent year, with an economy in permanent crisis mode”, summarizes Carsten Brzeski, analyst for the Bank ING.

Furthermore, in Asia, the indices of Tokyo Stock Exchange continued their dizzying rise on Monday, reaching new highs since 1990 thanks to more attractive Japanese securities, investor optimism for the Japanese economy and the fall in the yen. The index TAIEX from Taiwan increased by 0.19%, after the victory in the presidential election on the island of Lai Ching-te, of the Democratic Progressive Party (DPP) and in favor of the independence of Taiwan. And the Kuomintang (KMT), which wants a rapprochement with Beijing, obtained a majority in Parliament.

An informal American delegation visited Taipei and the president-elect on Monday thanked the United States for its “strong support for Taiwanese democracy.” For its part, China declared itself “firmly opposed” to any official exchange between the United States and Taiwan.

The Shanghai Stock Exchange increased by 0.15% and that of Hong Kong lost 0.17%, weighed down by a decline in the technology sector.

No appetite for meal delivery workers

Shares of meal or grocery delivery platforms fell sharply on Monday, after asset management company Exane advised to stay away from this sector, pointing to the challenge of increasing order volumes, according to the financial information agency Bloomberg.

Just Eat (TKWY) fell 6.80% in Amsterdam to 13.37 euros, Delivery Hero (DHER) lost 5.34% to 22.17 euros in Frankfurt and HelloFresh (HFG) 4.93% to 12.36 euros. In London, Ocado (OCDO) dropped 4.26% to 618.47 GBX and Deliveroo (ROO) 0.08% to 126.17 GBX.

Oil stabilizes

Oil prices are weakening slightly as the geopolitical risk premium narrows with the lack of tangible supply disruptions in the Middle East, leaving the market focused on signs of weaker demand.