2023-08-21 13:18:28
(Photo: The Canadian Press)
MARKET REVIEWS. Stock markets are up on Monday and bond rates are moving at high levels, after a weaker than expected reduction in Chinese interest rates, which pushed Chinese markets into the red.
Stock indices at 8:00 a.m.
In Europe, around 7:20 a.m., Paris gained 1.18%, Frankfurt 0,74%, Milan 1,58% et London 0.52% in a summer session where the absence of certain investors can cause greater variations.
Wall Street was heading for a slightly higher open, around 0.5% according to the futures of the three major indices.
In China, the Stock Exchange Shanghai closed sharply lower (-1.24%), as did Shenzhen (-1%) et Hong Kong (-1,57%).
The context
“The week begins with a weak appetite (for risk, editor’s note) because Chinese banks have cut interest rates less than expected,” commented Ipek Ozkardeskaya, analyst at Swissquote Bank.
On Monday, China decided to cut the one-year interest rate, which serves as a benchmark for business loans, to 3.45% to stimulate the economy, but failed to convince the markets.
Ipek Ozkardeskaya points out that “healthy economic data from the United States and darker clouds over China are casting shadows over the stock and bond markets”. In the United States, investors are wondering about a possible further rise in rates given the risk of a resumption of inflation.
This week, investors’ eyes will be on the annual meeting of central bankers in Jackson Hole, USA, where Jerome Powell, Chairman of the US Federal Reserve (Fed) and Christine Lagarde, President of the European Central Bank (ECB ), are scheduled to deliver speeches on Friday.
“It’s a safe bet” that the Fed will maintain its position, but the fear of monetary tightening “is already priced in,” said Ipek Ozkardeskaya.
On the bond market, the interest rate on US 10-year debt is close to its highest since 2007, around 7:40 a.m., it stood at 4.29%. That of Germany was at 2.67% against 2.62% at the close on Friday.
Real estate loses credit
The global real estate sector is struggling on Monday, with most values falling amid high borrowing rates. In London, the giant Persimmon lost 2.77% around 07:30, Hammerson dropped 2.78% and Crest Nicholson 7.15%. For his part, the German day real estate lost 2.04% in Frankfurt.
In China, too, the shares of real estate groups fell on Monday, the situation of the sector, with its share of developers on the verge of bankruptcy and unfinished housing, being a brake on Chinese growth and worrying investors.
In Hong Kong, Longfor Group fell 3.70%, China Resources Land by 3.45% and Logan Group of 4.47%. One of China’s largest real estate groups, Country Gardenwhose debt worries the markets, also ended in the red (-2.94%).
On the side of oil, gas and currencies
Oil prices were up around 07:40: the baril de Brent de la mer du Nordfor October delivery, gained 1.19% to 85.82 US dollars (US$) and its American equivalent, the baril de West Texas Intermediate (WTI)for September delivery, gained 1.06% to US$82.12.
On the foreign exchange market, the euro gained 0.34% against the US dollar at US$1.0910 for one euro.
On the natural gas side, the futures contract for TTF Netherlands, considered the European benchmark, was moving without a clear direction, at 38.50 euros per megawatt hour (MWh), shortly after climbing to 42.66 euros per MWh. The market remains alert to developments in Australia where a call for a strike at offshore liquefied natural gas (LNG) platforms in the West sparked a price spike earlier in August. Investors fear that Asian buyers in need of LNG will switch to the European market.
1692628945
#Stock #market #moving #markets #opening #Monday