by Claude Chendjou
PARIS (Reuters) – European stock markets, with the exception of Frankfurt, ended in the green on Monday, mainly supported by oil stocks and cheap buying, after a thin session in the absence American investors because of a national holiday in the United States.
In Paris, the CAC 40 ended with a gain of 0.4% to 5,954.65 points. The British Footsie took 1.03%. The German Dax, on the other hand, lost 0.31%.
The EuroStoxx 50 index advanced 0.3%, the FTSEurofirst 300 0.71% and the Stoxx 600 0.61%.
The rebound shown on Monday by most European stock markets could however be short-lived as concerns about inflation and recession are far from over.
Data released Monday by the Federal Statistical Office (FSO) show that inflation in Switzerland reached its highest level in 29 years in June with a rate of 3.4% over one year. In the euro zone, inflation came out last Friday at a record level of 8.6% over one year in June, while producer prices, published on Monday, showed an increase of 36.3% over one year in May.
Data from the Sentix survey also indicated on Monday that the sentiment of investors in the euro zone deteriorated more than expected in July to fall to its lowest level since May 2020, suggesting, says the research firm, a “inevitable” recession.
Investors also have their sights set on the minutes of the June monetary policy meetings of the US Federal Reserve and the European Central Bank, which will be released on Wednesday and Thursday, respectively. Added to this are the highly anticipated figures on Friday from the monthly report on employment in the United States.
In France, on the political level, two weeks after the setback of the presidential camp in the legislative elections, a new team of 41 members led by Elisabeth Borne was presented on Monday, with Olivier Véran as the new government spokesperson and the departure of Damien Abad, targeted by a complaint for attempted rape.
VALUES IN EUROPE
In Europe, the energy (+4.1%) and basic resources (+1.43%) compartments, driven by fears over supply, posted the best performances of the Stoxx 600, while On the other side of the spectrum, real estate (-2.73%), penalized by the prospect of a rapid rise in interest rates, posted the sharpest drop. TotalEnergies advanced by 4.54%, Shell by 3.86%, BP by 4.40% and Eni by 3.12%.
In corporate news, Atos plunged 10.61% as several group shareholders wrote to the board demanding the departure of chairman Bertrand Meunier, according to an article in the daily Le Monde.
Elior, down 4.28%, was also penalized by the announcement of the appointment of Bernard Gault as CEO, with analysts pointing to the catering group’s inability to find an external candidate.
Elsewhere in Europe, EasyJet fell 4.40% on news that deputy chief executive Peter Bellew had resigned amid flight cancellations, while Austrian sensor maker AMS Osram was down 7. 86%, affected by the lowering of JP Morgan’s recommendation to “neutral” on the stock.
AT WALL STREET
The New York Stock Exchange, which ended up on Friday, will remain closed on Monday due to July 4, Independence Day in the United States.
CHANGES
The dollar, at a 20-year high, advanced 0.11% against a basket of benchmark currencies amid reduced trading volumes.
The euro, down 0.09%, is trading at $1.0419, barely above the five-year low hit in May at 1.0349. The single currency, which has lost 8% since the start of the year against the dollar, is suffering from monetary tightening by the ECB, which is considered more modest than that of the Fed.
RATE
Bond yields in Europe rebounded after falling last week as money markets now expect the cost of credit in the euro zone to rise by 140 basis points by the end of the year. Deutsche Bank Chairman Christian Sewing also said on Monday that he wanted the ECB’s key rate to be raised faster than announced, while Bundesbank President Joachim Nagel said the fight against inflation may require more rate hikes than expected.
The ten-year German Bund yield ended with a gain of 11 basis points to 1.333% and that of the French OAT of the same maturity took 12.9 points to 1.936%.
OIL
Oil prices are rising, with supply pressures outweighing fears of a recession, which could penalize demand. Reuters survey shows OPEC production cut in June, while Libya and Ecuador hit by unrest and Norway could be cut this week by around 8% by strike .
JP Morgan analysts also estimate that oil could reach the stratospheric mark of $380 a barrel in “the most extreme scenario”, one where Russia decides to reduce its oil production by five million barrels per day (bpd). ) in response to the sanctions envisaged by the G7.
At the close of trading in Europe, Brent rose 1.82% to 113.66 dollars per barrel and American light crude (West Texas Intermediate, WTI) advanced 1.78% to 110.36 dollars per barrel.
(Written by Claude Chendjou, edited by Sophie Louet)