by Laetitia Volga
PARIS (Reuters) – European stock markets ended in dispersed order on Thursday and Wall Street reduced its gains, torn between signs of slowing US inflation and lingering uncertainties about the pace of monetary tightening by the Federal Reserve.
In Paris, the CAC 40 gained 0.33% to 6,544.67 points. The British Footsie lost 0.55%, penalized by GSK, and the German Dax lost 0.05%.
The EuroStoxx 50 index closed up 0.21%, the FTSEurofirst 300 0.08% and the Stoxx 600 0.06%.
At the time of the close in Europe, Wall Street was in disarray after a higher open: the Walt Disney-backed Dow Jones gained 0.5%, the S&P-500 gained 0.36% and the Nasdaq Composite fell 0.5%. 0.05%.
A day after news of a slowdown in the U.S. consumer price index (CPI), today’s data showed producer prices (PPI) fell unexpectedly last month , fueling investor hopes that the Federal Reserve will moderate the scale of its next rate hikes.
However, several bank officials have said in the past 24 hours that inflation remains too high (more than four times the 2% target) and that rate hikes should continue.
Some analysts are thus warning against excessive optimism, believing that the US central bank will have to rely on other elements to influence the tightening of its monetary policy.
“We would still like to see a real trend emerge next month and see that the fall in prices does not necessarily only concern energy. We would like to see the prices of other sectors fall. The CPI and PPI indices have given investors hope that the price spike was finally peaking but it’s too early to tell,” said Joe Saluzzi, at Themis Trading.
VALUES
On the stock market, the Sanofi and GSK laboratories lost 3.33% and 10.06% respectively, affected by fears that legal proceedings against Zantac in the United States will lead to costly decisions.
Valneva dropped 1.52% after lowering its full-year revenue target due to falling orders for its COVID-19 vaccine.
Insurer Aegon jumped 8.90% after raising its guidance for working capital generation for the year and free cash flow for 2021-23, buoyed by second-quarter operating profit better than expected.
EXCHANGES/RATES
On the currency side, the “dollar index”, which measures the fluctuations of the greenback against a basket of reference currencies, continues to decline (-0.23%) after showing its worst daily performance in five months the day before. .
The euro rose to 1.0333 dollars (+0.35%).
“Risk appetite has rebounded across the financial landscape on the prospect of less restrictive monetary policy from the Fed,” said Karl Schamotta, chief strategy officer at Corpay.
The yield on ten-year US Treasuries, at 2.8403%, regained more than five basis points.
In Europe, that of the ten-year German Bund reached a two-week peak in session at 0.99%.
OIL
Oil prices are on the rise after the International Energy Agency raised its forecast for crude demand growth this year, as soaring gas prices prompted some consumers to turn to oil.
Brent gained 1.52% to 98.88 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.74% to 93.53 dollars.
(Written by Laetitia Volga, edited by)