2023-06-20 12:28:40
(Photo: The Canadian Press)
MARKET REVIEWS. Global stock markets fell on Tuesday as investors expressed their disappointment following the measures announced by the Chinese central bank to stimulate the economic recovery in China.
Stock market indices at 8:30 a.m.
The scholarship of Paris was stable at the start of the session in Europe. That of London added 0.1% and that of Frankfurt yielded 0.4%.
In New York, before the markets open, the average Dow Jones of industrial stocks and the broader index S&P 500 were down 0.4%.
In Asia, the Nikkei 225 added less than 0.1% in Tokyo. The scholarship of Shanghai fell 0.5% and the Hang Seng plunged 1.5% in Hong Kong. Sydney took 0.9% and Seoul lost 0.2%.
On the New York Commodity Exchange, the price of oil dropped 51 US cents to US$71.27 a barrel.
The context
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.
Highly followed by the markets, these two rates are now at their historic lows. They were last cut in August 2022. But bigger cuts were hoped for by investors.
“Targeted fiscal support is probably needed because cutting rates when investment and consumption weaken due to a crisis of confidence may not yield much,” said Swissquote analyst Ipek Ozkardeskaya.
Conversely, in Europe and the United States, investors are concerned regarding raising key interest rates in order to fight inflation.
“Investors are increasingly finding it more likely that the European Central Bank will raise further following its July meeting in September,” Deutsche Bank analysts said.
Interest rates on the European government bond market rose sharply on Monday, but stabilized on Tuesday.
As on Monday, few events are expected by investors, apart from a few speeches from central bank officials and real estate statistics in the United States.
Sanofi wins Zantac arbitration
The pharmaceutical laboratory Sanofi rose by 2.90% in Paris following a final arbitration rendered indicating that it would not be forced to compensate another laboratory, Boehringer Ingelheim, for damages which would be caused by the long-term legal proceedings launched concerning the drug once morest the Zantac heartburn in the United States.
Patients accused several laboratories including GSK, Sanofi and the American Pfizer of having contributed to their cancer by selling Zantac.
Chemistry lacks oxygen
The chemical sector looked gray at the Dax in Frankfurt, following a warning on results from the specialty chemist Lanxess. The group’s title lost 16.65%, following having slashed its profit forecasts for the current year on Monday evening, the expected EBITDA operating profit falling from “between 850 million to 950 million” to “between 600 and 650 million “.
The company points in particular to the “very low demand” in the “construction” and “electronics” industries.
All the other heavyweights in the sector, which have also been suffering for several months from high energy costs in Europe, and particularly in Germany, plunged in Frankfurt: BASF (-2,89%), Covestro (-5,09%), Bayer (-0.74%). In Paris, Solvay lost 2.56%.
On the side of oil and raw materials
Oil prices were trending higher, boosted by China’s benchmark interest rate cut, but tempered by worries regarding the country’s growth.
barrel American WTI took 0.43% to US$72.09 and a barrel of Brent 1,05% à 76,89 $US.
L’euro gained 0.06% to US$1.0928.
The bitcoin took 0.22% to US$26,750.
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