PARIS (Reuters) – European stock markets ended slightly lower on Friday on growing fears that the Federal Reserve will stick to a tight monetary policy longer than expected.
In Paris, the CAC 40 lost 0.25% to 7,347.72 points. Britain’s Footsie fell 0.1% and Germany’s Dax 0.33%.
The EuroStoxx 50 index ended down 0.52%, the FTSEurofirst 300 0.2% and the Stoxx 600 0.2%.
At the time of the close in Europe, the main indexes on Wall Street were down 0.3% to 1.4%.
The stock markets remain affected by the publication in recent days of American indicators which testify to the tenacity of inflation and the solidity of the labor market.
Two Fed officials, Loretta Mester and James Bullard – who are not voting members of the committee this year – said on Thursday that the U.S. central bank likely should have raised rates more early in the month.
“The pessimistic view of the global economy and the optimism about the disinflationary trend in prices have been called into question this week (…) Stock indices could face a more difficult second half of February if the Fed seriously plans to return to an increase of 50 basis points in March”, can we read in a note from Societe Generale.
Goldman Sachs and Bank of America Global Research are now betting on three more quarter-point rate hikes this year, not two.
On the side of the European Central Bank, the member of the executive board Isabel Schnabel indicated that financial investors were perhaps underestimating the persistence of inflation in the euro zone.
VALUES IN EUROPE
Among the most marked sectoral declines of the day, the high technology compartment dropped 1.67% and that of energy 1.92%.
Teleperformance lost 2.70% after reporting quarterly revenue growth and annual profit fell short of expectations.
The luxury group Hermès took 0.34% after the announcement of higher-than-expected growth in its turnover in the fourth quarter.
On the SBF 120 side, Air France-KLM gained 5.32% and Ubisoft 3.78% after the publication of good results and forecasts.
RATE
The yield on ten-year US Treasuries rose to 3.929%, the highest in three months, a move helped by the prospect that the Fed will keep rates higher for longer to fight inflation.
In Europe, the rise in yields subsided following a speech by the Governor of the Banque de France, who said that ECB rates could peak this summer.
The ten-year German ended the day at 2.459%, after a session high of more than 2.55%.
CHANGES
The dollar appreciated by 0.21% against a benchmark basket and the euro stabilized around 1.0678 dollars.
OIL
The oil market is falling and heading for a negative weekly performance on the prospect that the Fed’s monetary tightening will increase and dampen demand.
Brent fell 2.48% to 83.03 dollars a barrel and US light crude (West Texas Intermediate, WTI) 2.87% to 76.24 dollars.
(Laetitia Volga, edited by Tangi Salaün)
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