EUROPEAN STOCK MARKETS, EXCEPT LONDON, END DOWN
by Marc Angrand
PARIS (Archyde.com) – European stock markets, with the exception of London, ended down on Tuesday, the marked decline on Wall Street, where nervousness is rising before the publication of results from heavyweights in the market, having overcome the rebound which had marked the first part of the session.
In Paris, the CAC 40 lost 0.54% (34.81 points) to 6,414.57 points after rising in the morning to 6,535.92 and in Frankfurt, the Dax dropped 1.2% while in London, the FTSE 100 gained 0.08% thanks to the good performance of mining and oil stocks.
The EuroStoxx 50 index fell 0.96%, the FTSEurofirst 300 0.76% and the Stoxx 600 0.9% after gaining as much as 1%.
At the time of the close in Europe, Wall Street widened its losses, the Dow Jones yielding 1.62%, the Standard & Poor’s 500 1.98% and the Nasdaq Composite 3.1%.
American investors, who had welcomed at the end of the session Monday the green light from Twitter to the takeover offer of Elon Musk, now favor caution before the publication of results of the largest capitalizations in the high technology sector: Microsoft and Alphabet will present theirs after the close, Meta and Qualcomm on Wednesday, Apple and Amazon on Thursday.
In the meantime, Microsoft yields 2.63%, Alphabet 3.27% and the S&P index of high technologies 2.9%.
“Given the pattern of the markets, if just one of these tech companies releases results below expectations, it can become dangerous because the downward slope is slippery,” said Julius de Kempenaer, senior technical analyst at StockCharts.com.
This nervousness linked to the performance of “techs” and their ability to justify their valuation is added to the renewed concern aroused by the health situation in China, where Beijing is trying to avoid large-scale confinement, and to the upcoming rise interest rates of the major central banks, led by the US Federal Reserve.
VALUES
While almost all progressed mid-session, a majority of the major sectors of the European rating ended the day down. The most marked declines are for the automobile, whose Stoxx index lost 2.41%, for technology (-2.25%) and for banks (-2.25%).
On the rise, raw materials (+1.13%) and energy (+0.92%) benefited from the rebound in copper and oil prices.
In Paris, the largest increase in the SBF 120 is for the oil services group CGG (+3.77%), the largest drop for Faurecia (-10.74%) after the suspension of the dividend decided by Forvia, the whole born of the acquisition of the German Hella.
Elsewhere in Europe, banks Santander and HSBC lost 6.79% and 5.53% respectively after their results while shipping giant Maersk gained 3.17% after raising its full-year profit forecast.
CHANGES
The dollar continues to benefit both from its attractiveness as a safe haven and from the prospect of rising US interest rates, which allows it to move to a two-year high against a basket of benchmark currencies ( +0.38%).
Conversely, the yuan is still suffering from fears of a marked slowdown in Chinese growth and the euro is widening its losses to 1.0657, not far from its lows of March 2020 (-0.50%).
RATE
Benchmark bond yields in Europe ended lower in the wake of those on US Treasuries but remain close to their recent highs as rising interest rates remain unchallenged.
That of the ten-year German Bund thus fell by nearly four basis points to 0.814%, against 0.974% at its highest on Monday. Its decline was limited by statements by Marin Kazaks, Governor of the Central Bank of Latvia, who does not rule out three rate hikes by the European Central Bank (ECB) by the end of the year.
The ten-year US fell eight points to 2.7395% but still shows nearly 40 points up since the beginning of the month.
OIL
Still down at the start of the day after a decline of around 4% on Monday, the oil market is back in the green after the Chinese central bank’s promises of support for the economy.
Brent gained 2.76% to 105.14 dollars a barrel and American light crude (West Texas Intermediate, WTI) took 3.11% to 101.60 dollars.
(Written by Marc Angrand, with Bansari Mayur Kamdar and Devik Jain in Bangalore, edited by Jean-Michel Bélot)