Europe ends in the green, driven by American tech – 07/27/2022 at 18:43


EUROPEAN STOCK MARKETS END UP

(Reuters) – European stocks ended higher on Wednesday, buoyed by earnings from U.S. technology companies, as the Fed is expected to announce another rate hike.

In Paris, the CAC 40 ended up 0.75% at 6,257.94 points. The British Footsie gained 0.67% and the German Dax 0.57%.

The EuroStoxx 50 index rose by 0.95%, the FTSEurofirst 300 by 0.53% and the Stoxx 600 by 0.49%.

“Strong results from Microsoft and Alphabet have given new impetus to market sentiment, raising hopes that companies can handle tighter monetary conditions and a slower economy,” said Pierre Veyret, analyst at ActivTrades.

Markets await announcements from the Federal Reserve in order to know its point of view on the slowdown in the global economy and the possible impact this will have on the tightening of its monetary policy.

Investors mostly believe that the Fed, which will publish its press release at 6:00 p.m. GMT, will raise its rates by 75 basis points. The statements of Jerome Powell, the president of the institution, are particularly awaited. He will speak 30 minutes later.

VALUES

European technology stocks are the biggest winners of the day (+1.5%), while the sector index for pharmaceuticals and health loses 0.82%.

In individual values, the Atos title jumped 16.24% after announcing the securing of the financing of its transformation plan and having said that it expects an acceleration in the growth of its turnover in the second half.

Michelin lost 6.12%, after announcing a net result impacted by the cost of its withdrawal from Russia.

AT WALL STREET

At the time of the closing in Europe, the Dow Jones gained 0.49% – Microsoft notably progressing by 4.8% – the Standard & Poor’s 500 1.43% and the Nasdaq Composite 2.56%.

CHANGES

On the foreign exchange market, the euro is trading around 1.0126 dollars (+0.12%) after having fallen by 1% the day before following an agreement between the Twenty-Seven on a reduction in their consumption of gas next winter against a backdrop of uncertainty about supplies from Russia.

The dollar index, which measures the variations of the greenback against a basket of reference currencies, was almost stable before the Fed’s verdict.

RATE

The cost of Italian sovereign borrowing rose on Wednesday as S&P Global downgraded its rating outlook from positive to stable due to the economic impact of ongoing political instability.

Italy’s 10-year bond yield rose nearly 12 basis points (bps) to 3.47%, bringing the spread over top-rated Germany to around 252 bps , its highest level since mid-June.

The yield on US 10-year Treasury bills stands at 2.7776%, down more than 1 basis point.

OIL

Oil prices rose after the American Petroleum Institute (API) announced a bigger-than-expected decline in crude inventories in the United States last week.

Brent gained 2.14% to 106.63 dollars a barrel, and American light crude (West Texas Intermediate, WTI) 2.54% to 97.39 dollars.

(Written by Olivier Cherfan, edited by Jean-Michel Bélot)



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