PARIS (Reuters) – European equities fell at the start of the session on Thursday, penalized by a further upward revision of expectations for a rise in American rates, a return of political risk in Italy and the cautious start to the season. quarterly results.
In Paris, the CAC 40 lost 0.12% to 5,993.26 points at 07:30 GMT and in London, the FTSE 100 lost 0.24% while in Frankfurt, the Dax advanced by 0.2%.
The EuroStoxx 50 index is down 0.05%, the FTSEurofirst 300 0.31% and the Stoxx 600 0.09%.
The shock caused on the markets on Wednesday by the higher-than-expected inflation figure in the United States (9.1% over one year in June, unheard of since 1981) led many investors to revise their expectations in interest rates, many of them now not excluding that the Federal Reserve opts for a hike of 100 basis points on July 27th.
If Wall Street managed to finish above its lows of the day, the futures contracts on the main American indices augur a new decline.
“Yields have risen and bonds are becoming more and more attractive relative to the equity market,” Saxo Bank explains in its daily note, stating that “now less than 15% of S&P 500 companies can offer a dividend yield. higher than the American ten-year rate”.
The session will be animated by, among other things, the new economic forecasts from the European Commission at 09:00 GMT, the figures for producer prices in the United States at 12:30 GMT and the results of JPMorgan Chase and Morgan Stanley, two of the main American banks.
Investors will also watch the outcome of the vote of confidence planned in Italy, which threatens to smash the broad government coalition led by Mario Draghi.
This risk is already reflected in a sharp rise in yields on Italian debt and in a weakening of the euro, down 0.37% against the dollar at 1.0023. The Milan Stock Exchange fell by 1.09%.
In European earnings news, Ericsson fell 9.5% after quarterly results fell short of expectations as its margins suffered from higher component prices and logistics costs.
Swatch Group gains 0.94% after rising half-year results which allow it to reaffirm its annual forecasts and the Swedish bank SEB takes 1.48% after a quarterly profit above the consensus.
(Writing by Marc Angrand, editing by Kate Entringer)
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