MAJOR EUROPEAN STOCK EXCHANGES EXPECTED TO UP
by Laetitia Volga
PARIS (Reuters) – The main European stock markets are expected to rise on Friday at the opening for the last session of a week marked again by fears about the pace of global growth and inflation.
Futures contracts give an increase of 1.05% for the Parisian CAC 40, 0.39% for the Dax in Frankfurt, 0.62% for the FTSE in London and 0.79% for the EuroStoxx 50 .
Over the week as a whole, the Stoxx 600 is currently down about 0.21%, the CAC 40 is almost unchanged (+0.012%).
For some market participants, the recent decline in commodity prices, fueled by concerns about the slowing economy, could prove to be a good thing in the inflationary environment.
Copper prices on the London Metal Exchange are heading for their worst weekly performance in a year and crude prices for a second week in the red.
“For equities to regain any semblance of strength, it would likely take…an unbroken recovery in growth in China, a spike in Treasury yields and much lower oil prices. Although a tall order and an unlikely combination in the short term, falling commodity prices, especially oil, should be sweet music to the ears of the Federal Reserve,” said Stephen Innes, at SPI Asset Management.
Investors will watch the Ifo business climate index in Germany due at 08:00 GMT and that of the University of Michigan in the United States at 14:00 GMT.
AT WALL STREET
Wall Street’s major indexes ended higher on Thursday as gains in sectors deemed defensive and technology stocks outweighed concerns about recessionary risk.
The Dow Jones index gained 0.64% to 30,677.36 points, the S&P-500 gained 0.95% to 3,795.73 points, and the Nasdaq Composite advanced 1.62% to 11,232.19 points. .
Benchmark bond yields fell to their lowest level in two weeks, which supported growth stocks, which are sensitive to rate movements.
The technology sector rose 1.44%, Microsoft 2.26% and Apple 2.16%.
Among the defensive compartments, considered safer bets in times of economic crisis, “utilities” rose by 2.35%, healthcare by 2.22% and real estate by 2%.
Futures currently signal an open up around 0.6% for the three major Wall Street indices.
IN ASIA
In Tokyo, the Nikkei gained 1.23%, driven by technology stocks in the wake of Wall Street.
Like the rest of the world markets, Chinese stock markets are moving up as commodity prices retreat and the People’s Bank of China has increased the injection of liquidity into the banking system in the face of increased demand for cash.
The CSI 300 index gained 1.29% and the SSE in Shanghai 1.08%.
In Hong Kong, Alibaba climbed 6.76%, continuing to benefit from President Xi Jinping’s support for payments and fintech companies.
RATES/EXCHANGES
The yield on 10-year Treasuries fell to 3.089% the previous day after falling to a two-week low of 3.005% the previous day on concerns that the Federal Reserve could cause a recession by raising rates too quickly.
The German ten-year, the benchmark rate in Europe, was little changed in early trading at 1.438%.
On the foreign exchange market, the dollar is slightly down against a basket of major reference currencies (-0.16%) and the euro is up 0.1% at 1.0533 dollars.
The pound pared its gains slightly after the release of UK retail sales figures, showing a revised gain of 0.4% for the month of May from +1.4% initially reported.
OIL
On the oil market, prices are rising after falling sharply recently with fears for demand.
Brent gained 0.35% to 110.43 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.56% to 104.85 dollars.
Over the whole week, they show a loss of 2.3% and 4.2% respectively.
(Written by Laetitia Volga, edited by Bertrand Boucey)