by Claude Chendjou
PARIS (Reuters) – European stocks ended with no clear direction and Wall Street was also in disarray mid-session, with investors divided after the surprise 50 basis point hike in rates by the European Central Bank (ECB) and the presentation of a new anti-fragmentation instrument on the bond markets.
In Paris, the CAC 40 ended up 0.27% at 6,201.11 points. The British Footsie gained 0.09%. The German Dax lost 0.27%. and in Milan, the FTSE MIB lost 0.71%, penalized in particular by the banking sector (-2.9%).
The EuroStoxx 50 index gained 0.31%, the FTSEurofirst 300 0.18% and the Stoxx 600 0.44%.
The European Central Bank (ECB) on Thursday raised its rates more than expected, by half a point, as fears of inflation outweighed the risks of a deterioration in the economy even as the euro zone economy is already suffering the consequences of the war in Ukraine.
It also agreed to provide further assistance to the bloc’s most indebted countries by approving a new securities purchase program (Transmission Protection Instrument or Instrument de protection de la transmission, TPI), intended to limit the rise in their costs. borrowing and reduce financial fragmentation.
The ECB’s announcements initially briefly pushed stock market indices down, notably the Stoxx 600, but most of them returned to positive territory at the close.
Some analysts, like those of ING, explain this movement by the fact that the ECB now considers that it has little room for maneuver left for a series of increases while inflation has reached the record level of 8.6% over one year in June. Before its press release on Thursday, the ECB had indicated in June that it would increase the cost of credit by only 25 points.
Moreover, the aggravation of the political crisis in Italy, where the President of the Council, Mario Draghi, submitted his resignation to President Sergio Mattarella on Thursday, hardly encouraged risk-taking, even if the results of the companies offered some support.
VALUES IN EUROPE
In Europe, finance (+2.26%), new technologies (+2.01%) and media (+1.75%) recorded some of the best sector performances, thanks to the rise in interest rates and the good results of the companies in these compartments.
Publicis jumped 5.05% on the back of higher annual forecasts and better-than-expected results in the first half. [S8N2WW02Z] In its wake, the British WPP advanced by 1.874%.
The publications of Nokia (+9.29%), ASM International (+14.04%), IG Group (+10.049%) or even Sartorius (+8.14%) were also welcomed.
On the downside, the German software specialist SAP (-2.84%) suffered from the reduction in its annual profit forecast, while the results of SEB (-10.18%) and Electrolux (-3.95%) been sanctioned.
In the Italian banking sector, BPER, Unicredit, Banco BPM and Intesa Sanpaolo lost 2.7% to 4% amid the political crisis.
AT WALL STREET
At the time of the close in Europe, the Dow Jones fell 0.26%, while the Standard & Poor’s 500 advanced 0.32% and the Nasdaq 0.62%
The positive trend is notably supported by Tesla, which jumped 7.91% after reporting an increase in its quarterly profit, supported by the price increase of several of its models, which allowed it to overcome problems of production.
The technological compartment advances by 0.72% with Apple or Amazon.
In the red, telecoms giant AT&T, which lowered its free cash flow forecast, fell 8.36%, dragging rivals Verizon and T-Mobile US, which lost around 3% as the service sector of communication falls back by 0.98%.
CHANGES
In foreign exchange, the euro rose to 1.0278 dollars in session in response to announcements from the ECB before reducing much of its gains and trading at 1.0188 at the close of trading in Europe.
The dollar, consolidating its recent gains, fell (-0.2%) against a benchmark basket but is still trading at a 24-year high against the yen, as the Bank of Japan (BoJ) left its rates on Thursday. interest unchanged.
RATE
On the bond market, the yield spread between the ten-year Italian and the German Bund of the same maturity widened to 247.70 basis points, a level it had not reached since mid- June and which had triggered an emergency meeting of the ECB.
This spread finally fell to 233.70 points at the close of trading in Europe, while the ten-year Italian BTP rate took 10.3 points to 3.570% and that of the German Bund of the same maturity ended down by about four points to 1.225%.
In the United States, the yield on ten-year Treasuries fell by about eight points to 2.9541%.
OIL
The oil market is affected by fears over demand as interest rates rise and gasoline inventories rose faster than expected last week in the United States, according to data from the United States Agency. energy information.
The barrel of Brent dropped 2.22% to 104.55 dollars and that of American light crude (West Texas Intermediate, WTI) 2.99% to 96.89 dollars.
(Some data may show a slight shift)
(Written by Claude Chendjou, edited by Matthieu Protard)