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MARKET REVIEW. European stock markets rebounded on Monday, reassured by the Chinese Central Bank, which slightly eased its monetary policy to boost growth stifled by the resumption of the pandemic. Wall Street was closed on Monday for the Martin Luther King Day holiday.
Stock market indices at 8:32 a.m.
In the USA, Wall Street was closed for the Martin Luther King Day holiday.
In Europe, markets were growing. In London, the FTSE 100 rose 59.33 points (+0.79%) to 7,602.28 points. In Paris, the CAC 40 advanced by 48.76 points (+0.68%) to 7,191.76 points. In Frankfurt, the DAX increased by 66.44 points (+0.42%) to 15,949.68 points.
In Asia, the Nikkei Tokyo closed up 209.24 points (+0.74%) to 28,333.52 points. For his part, the Hang Seng Hong Kong ended down 165.29 points (-0.68%) at 24,218.03 points.
On the oil side, the price per barrel of American WTI was down US$0.06 (-0.07%) at US$83.76. The barrel of Brent de la mer du Nord was down US$0.24 (-0.28%) at US$85.82.
The context
China announced on Monday a gross domestic product (GDP) up 8.1% in 2021, the highest in a decade. However, in the fourth quarter, growth lost momentum (+4% over one year, following 4.9% in the previous one).
Worrying data for domestic demand, retail sales, the main indicator of consumption, rose last month by only 1.7%, year on year, their weakest increase since the summer of 2020.
In the followingmath, China’s central bank cut a key interest rate on Monday for the first time since April 2020 to support the economy.
The rate at which it lends to the country’s banks has been cut by 10 basis points, a measure that aims to facilitate lending to businesses.
The action of the Chinese Central Bank comes as the health situation is tense three weeks before the Winter Olympics.
Conversely, the phasing out of monetary support measures linked to the crisis is underway in the United States and to a lesser extent in Europe.
Investors seem to take for granted a first rate hike in March in the United States in order to curb the inflation which is affecting consumer confidence.
“Volatility is set to rise once more this week as investors cautiously watch the opening of the earnings season, curious to see how companies cope with the impact of the Omicron variant as well as the prospect of a tightening. monetary policy in the United States,” said Pierre Veyret, analyst at ActivTrades.
Risky assets, including equities, have so far fully benefited from the very low levels of interest rates, but also from excess savings and abundant liquidity linked to the health crisis.
“A slowdown in the economic regime has always been envisaged and growth will reduce once more in the coming quarters, as central banks around the world raise their rates in unison”, writes for his part Géraldine Sundstrom, manager. portfolio at Pimco.
The food and hygiene products giant Unilever clarified its growth strategy towards “health, beauty and hygiene” and persisted with a £50 billion offer for a unit of GSK Consumer Healthcare, rejected by GSK. The unit includes in particular brands of toothpaste or non-prescription drugs. The action Unilever fell 7.75% to 3,631.5 pence while GSK climbed 4.01% to 1,706.80 pence around 7:50 a.m. Quebec time.
The president of Credit Suisse, Antonio Horta-Osório, splashed by revelations around the quarantine rules he broke, has resigned from his functions, announced the bank, which chose Axel Lehmann to succeed him. Credit Suisse shares lost 1.63% to 9.39 Swiss francs.
Oil prices were heading lower once more mid-session, following extending their gains early in the day.
The European currency yielded 0.08% to 1.140 9 US dollar.
the bitcoin was down 0.78% at US$42,646.
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