EUROPEAN STOCK MARKETS END UP
by Laetitia Volga
PARIS (Reuters) – European stock markets ended higher on Tuesday but only erased part of the losses of the previous session on concerns about the economic situation on the eve of monetary policy decisions by the United States Federal Reserve.
In Paris, the CAC 40 gained 0.79% to 6,476.18 points. The British Footsie gained 0.22% and the German Dax gained 0.72%.
The EuroStoxx 50 index closed up 0.77%, the FTSEurofirst 300 0.34% and the Stoxx 600 0.53%.
The progression of the indices was favored by that of Wall Street, the major American indices posting an increase of 0.4% to 0.9%.
If Wednesday’s announcement of a 50 basis point Fed rate hike is no longer debated among market players, they are wondering what the institution could say or not say about the future trajectory. of its rates and the reduction of its balance sheet.
Investors fear that too aggressive monetary tightening will weigh down the global economy, already weakened by the war in Ukraine and the confinements linked to the COVID-19 crisis in China.
VALUES IN EUROPE
The most cyclical sectors such as automotive (+2.24%), banks (+2.19%) and energy (+4.12%) posted the strongest increases.
BNP Paribas climbed 5.15% after posting a quarterly net profit above expectations, as the strength of its market activities more than offset the impact of the war in Ukraine.
BP rose 5.80% after announcing its highest net profit since 2008 and an increase in its quarterly share buyback program.
The cosmetics group L’Oréal lost 1.94% after its American competitor Estée Lauder (-5%) lowered its profit target due to the health situation in China and the war in Ukraine.
Covestro fell 4.85% after lowering its full-year profit target citing the Shanghai lockdown and rising energy and commodity prices.
RATE
In the bond market, the yield on ten-year US Treasury bills exceeded 3% on Monday for the first time since December 2018, a threshold it crossed again in the morning, ahead of the Fed’s announcements on Wednesday.
It is now down seven basis points to 2.9263%.
In Europe, the ten-year German rose briefly to more than 1%, for the first time since June 2015. It ended the session almost stable around 0.95% after a peak at 1.016%.
In its wake, the ten-year French rose in the morning to a high since August 2014 at 1.544%.
CHANGES
In the foreign exchange market, the greenback fell 0.36% against a basket of benchmark currencies after hitting a nearly 20-year peak last week on expectations of sharp rate hikes in the United States. The euro rallied to $1.0533 but traders expect the single currency to remain under pressure in the coming days on fears over inflation, growth, war in Ukraine and a less restrictive bias in the ECB versus Fed.
The Australian dollar (+0.74%) benefited from the announcement by the RBA, Australia’s central bank, of its first rate hike in more than ten years.
DAY INDICATOR
Among the indicators published on Tuesday, producer prices in the euro zone rose more than expected in March, by 5.3% over one year.
OIL
Concerns about the consequences of health restrictions in China on demand weigh on the oil market: Brent fell 1.27% to 106.21 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.45 % at $103.64.
TO BE CONTINUED :
(Written by Laetitia Volga, edited by Tangi Salaün)