Paris drops 1.08% and London 1.27%. Frankfurt held up better (-0.67%), but over the week the DAX dropped more than 3%, as did the CAC 40. Zurich fell 1.01% at the close.
Stock markets remain weighed down on Friday by the determination of central banks to stay the course of their restrictive monetary policy to control inflation, even if it means further darkening the economic outlook.
After an opening without a clear trend, European stock markets closed for the third consecutive time in the red. Paris lost 1.08% and London 1.27%. Frankfurt resisted better (-0.67%), but over the week, the most decisive on the macroeconomic level at the end of the year, the German DAX fell more than 3%, as did the CAC 40. In Switzerland, the flagship SMI index lost 1.01% at the close.
The New York Stock Exchange remains convinced that the continuation of an offensive monetary policy will tip the American economy into recession next year, especially since the bad economic news has accumulated this week.
Around 5:05 p.m. GMT, the Dow Jones fell 1.39% and the Nasdaq index dropped 1.34%.
“The monetary and economic context is such that it is very difficult to imagine a resumption of the rebound until the end of the year”, underlines Raphaël Thuin, head of capital market strategies at Tikehau Capital.
This week, the American (Fed), European (ECB) and British central banks raised their key rates by 0.5 percentage points, moderate increases compared to the previous ones.
But the message from the Fed and the ECB in favor of sustainably higher interest rates at the expense of growth has cooled investors who were hoping for signs of a pause or an imminent end to the current monetary tightening cycle.
Faced with this prospect of further rate hikes, government debt yields continued to rise around 5:30 p.m. GMT on the bond market.
Recession fears are weighing on the markets but paradoxically their expectations for future corporate earnings do not show serious concern.
“Considered to be preserved according to the indicators at the start of the quarter, US growth is increasingly in the dark”, given the PMI indicators for December which put “recession risks at the center of the game”, writes Thomas Bauer of the Riches-Flores law firm.
In France, Germany, the United Kingdom and more generally in the euro zone, private sector activity contracted in December according to the PMI indices of the firm S&P Global.
In the euro zone, however, activity fell less sharply than in October and November.
In addition, this Friday corresponds to a so-called “four witches” session which marks the expiry of options and futures contracts on indices and shares by causing volatility.
Rain of red flakes
Pessimism is spreading in most sectors. As for raw materials, BP lost 2.24%, Shell 2.03% and TotalEnergies 1.36%. Miners ArcelorMittal (-1.64%) and Rio Tinto (-0.80%) also looked gray.
Green coat for bankers
If the prospect of rising rates was favorable to banking stocks such as BNP Paribas (+1.68%), Commerzbank (+5.77%) or Standard Chartered (+2.02%), it weighed down technology stocks such as Infineon (- 2.28%), Worldline (-2.81%) or Capgemini (-3.45%).
On the side of oil, currencies and bitcoin
Oil prices are slipping, weighed down by fears of recession and the decline in investor risk appetite.
The barrel of American WTI yielded 1.54% to 74.93 dollars and the barrel of Brent from the North Sea fell by 1.98% to 79.60 dollars around 5:30 p.m. GMT.
The euro fell 0.11% once morest the greenback, to 1.0617 dollars.
After suffering from the less aggressive tone of the Bank of England compared to its counterparts in Europe and the United States, the pound rose to 1.2194 dollars per pound (+0.13%).
Bitcoin lost 3.34% to $16,818.
