PARIS, March 14 (Reuters) – The main European stock markets rose at the start of the session on Monday, benefiting from a general revival of optimism on the negotiations between Ukraine and Russia as well as from the drop in oil prices.
In Paris, the CAC 40 gained 0.49% to 6290.89 points around 08:40 GMT. In London, the FTSE 100 takes 0.08% and in Frankfurt, the Dax advances by 1.79%. The EuroStoxx 50 index is up 0.86%, the FTSEurofirst 300 0.47% and the Stoxx 600 0.52%. On the oil market, the price of a barrel of Brent is down 2.18% to 110.21 dollars. A new round of negotiations between Russia and Ukraine was due to begin at 08:30 GMT via videoconference and both sides have reported progress in recent days, despite continued fighting in several parts of Ukraine.
The week that is beginning will also be animated by the monetary policy meetings of the American Federal Reserve, the Bank of England and the Bank of Japan, and the markets are expecting from the Fed a first rate hike justified by the level historically high inflation. This prospect and the renewed appetite for risk are favoring the rise in government bond yields: that of the five-year German Bund, for example, has gone back above 0.06% for the first time since February 16 and the American two-year hit its highest level in two and a half years at 1.809%.
On the equities side, Volkswagen, gained 6.28% after its results and its forecasts, the best performance of the EuroStoxx 50, and enabled the European automotive compartment to post the best sector performance at the start of the session (+3.24%) , ahead of insurance (+2.28%) and banks (+2.16%). Declining, EDF lost 0.5% after announcing that the impact on its results of government decisions concerning energy prices should be heavier than initially estimated. Sanofi drops 5.19%, the worst performance in the CAC 40, after the failure of a phase II trial of a treatment for breast cancer, in which several analysts see a setback for market confidence in the portfolio of products in development of the pharmaceutical group.
(Written by Marc Angrand, edited by Jean-Michel Bélot)