Volatility remains the key word on the Paris Stock Exchange, where the Cac 40 evolved within a margin of 130 points between its highest and its lowest this morning. The surge of more than 4% in oil prices is notably supporting the European heavyweights in the sector such as TotalEnergies (+4.2%), Shell (+5%) or BP (+4%), while the market continues to wonder about the economic impact of the war in Ukraine. The surge in consumer prices at a record rate of 5.8% over one year in February in the euro zone confirms these fears.
Russia says it is ready for a second round of negotiations on Wednesday, while indicating that it does not know whether the Ukrainian delegation intended to participate. President Zelensky said on Tuesday that stopping Russian bombing was a prerequisite for any discussion. The first meeting organized on Monday was unsuccessful and Russia has since intensified its attacks on major Ukrainian cities.
Mid-session, the Bedroom 40 resumed 0.38% to 6,420.95 points in a business volume of 2.3 billion euros. In Frankfurt, the Dax gains 0.22%. Heavily weighted in companies focused on raw materials, the Footsie London rose by 0.60%. The contracts future on American indices gained around 0.7%. The day before the S&P 500 had entered the correction zone after a decline of 10.6% compared to its record at the beginning of January.
OPEC+ should stay the course
The barrel of Brent touched 113.02 dollars this morning, a new high of seven years, and this despite the decision of the member countries of the IEA (International Energy Agency) to draw 60 million barrels in their strategic stocks in an attempt to stem the surge in prices. It is in this context that OPEC+, which has Russia in its ranks, must decide on its quotas on Wednesday. Specialists estimate that the enlarged cartel should not deviate from its plan to raise its production by 400,000 barrels a day next month.
Bloomberg also reports the reluctance of some traders and shipowners towards Russian oil, which could affect flows. The agency also indicates that an offer of oil from the Urals at a historically low price has not found a buyer.
A fragile sign of the beginnings of interest in risky assets, the yield on the American bond tightened by 2 basis points to 1.74%, while that of the German Bund of the same maturity oscillated around -0.03 %, against -0.06% last night.
Jerome Powell in a delicate position facing Congress
The market will watch, in the early afternoon, the ADP survey on job creations in the US private sector in February. It will be followed at 4 p.m. by Jerome Powell’s appearance before the House of Representatives Financial Services Committee as part of the first part of his biannual hearing before Congress. He should signal that the Federal Reserve intends to begin the process of normalizing its monetary policy, but he should also exercise caution regarding the geopolitical environment. European and American investors believe that central banks should be pragmatic and patient in normalizing their monetary policy.
Pressure remains strong on companies operating in Russia
The slight rise in interest rates is giving banks some breathing room. BNP Paribas thus resumed 0.2% after being reserved for the decline at the opening.
On the other hand, the pressures of the French State on companies present in Russia continue to weigh on Alstom (-1%) and Danone (-3.3%). Renault fell another 1.5%, bringing its fall to more than 18% over the week.
ArcelorMittal increased by 4.2% while the contracts future on iron ore topped $150 a ton, a gain of around 10% in three days.
Schneider Electric rises 2.6%. HSBC raised its recommendation on the stock from “hold” to “buy”.
bioMerieux plunged 10.4%. The in vitro diagnostics specialist published 2021 accounts that exceeded its objectives and analysts’ forecasts, but warned to expect a drop in its results this year, as demand linked to the coronavirus pandemic is expected to decline.
Albioma drops by 8.5%. The energy producer has expressed cautious forecasts for 2022, after having recorded results last year at the top of its forecast range thanks in particular to the good performance of its assets in Brazil and Turkey.