(Reuters) – European stock markets ended in disarray on Monday, as investors seemed torn between the temptation to continue the rebound that began last week and the caution needed before the next public interventions by the major central bankers.
In Paris, the CAC 40, after having taken up 1.37% in the morning, ended down 0.43% (26.04 points) at 6,047.31 points. In London, the FTSE 100 gained 0.69% and in Frankfurt, the Dax rose 0.52% but Milan gave up 0.69%.
The EuroStoxx 50 index gained 0.16%, the FTSEurofirst 300 0.62% and the Stoxx 600 0.52%, after going into the red.
At the time of the close in Europe, Wall Street was moving without a clear trend: the Dow Jones and the Standard & Poor’s 500 were up around 0.25% but the Nasdaq Composite was down 0.1%.
The hesitations of the oil market, the rise in bond yields after their fall last week and the geopolitical uncertainties against the backdrop of the G7 summit before that of NATO are curbing the appetite for risk which dominated last week.
In this context, several of the main capitalizations of the American high-tech sector, which had led the rebound last week, are suffering from profit taking, such as Microsoft, which lost 0.65% or Salesforce (-1.56%).
Markets could remain hesitant at least until Wednesday, awaiting speeches from Christine Lagarde, the President of the European Central Bank, and then Jerome Powell, her Federal Reserve counterpart, at the ECB’s Annual Forum in Sintra, Portugal.
“The question is not only whether inflation has peaked, it is also whether its deceleration will not require further intervention by central banks that could cause or deepen a recession”, explains Craig Erlam , senior analyst at Oanda.
VALUES
In Europe, the largest sectoral increase of the day is for the commodity compartment, whose Stoxx index took 1.83%, and the largest drop for services to communities (“utilities”) (-0.52 %).
Steelmaker ArcelorMittal gained 2.58%, mining giant Rio Tinto 1.45%.
The best performance of the Stoxx 600 is for the Dutch group Prosus, whose price jumped 15.72% after the announcement of a share buyback plan which it plans to finance by the sale of shares of Chinese Tencent , of which he owns 28.9%.
In the red, EssilorLuxottica lost 2.22% after the death of its president, Leonardo Del Vecchio. In Milan, Mediobanca and Generali, in which the Italian businessman was a shareholder, yielded 2.16% and 3.03% respectively.
RATE
After two sessions of sharp declines, bond yields in the euro zone started to rise again, as inflation worries resumed the upper hand: that of the ten-year German Bund, which had fallen by more than 20 basis points last week, gained ten to 1.551%.
In the US Treasuries market, the 10-year was up more than six basis points at the European close at 3.1865%, supported by better than expected durable goods orders (+0 .7% in May) and real estate sales promises in the United States (+0.7% also last month) published at the start of the day.
CHANGES
While Treasuries yields are rising, the dollar continues to suffer from questions about inflation and interest rates and remains on a downward trend against other major currencies (-0.41%).
The euro appreciated 0.45% against the greenback at 1.0601.
OIL
The oil market is moving up and down, investors seem unable to arbitrate for the moment between speculation on possible decisions by the G7 aimed at limiting the rise in prices and the risk of a deterioration in demand.
After several trend reversals since the start of the day, Brent has so far gained 1.66% to $115.00 a barrel and US light crude (West Texas Intermediate, WTI) 1.75% to 109.50 dollars.
(Written by Marc Angrand)