PARIS (Reuters) – European markets ended sharply lower on Thursday, with the exception of the FTSE, after indicators in the United States called into question investors’ prospects, while the results season continues.
In Paris, the CAC 40 lost 0.93% to 8,016.65 points, while the German Dax fell 0.91%. The British Footsie, supported by the raw materials sector, rose 0.48%.
The EuroStoxx 50 index ended the session down 0.99%, compared to 0.63% for the FTSEurofirst 300 and 0.65% for the Stoxx 600.
US GDP figures for the first quarter, released on Thursday, were worse than expected, while the underlying inflation indicator surprised on the upside.
The surprise on the PCE indicator is bad news, because it now seems likely that the PCE indicator for March, due Friday, will also surprise to the upside – this as the Federal Reserve meets on Wednesday May 1 and could decide to adopt a more restrictive tone in the face of persistent inflation.
The slowdown in activity could continue, but will take time to be transmitted to inflation.
“We expect more moderate activity in the coming quarters, while the divergence between leading indicators and official data is very significant,” note ING strategists.
“Business caution will likely result in a slowdown in hiring and wage growth, as well as business investment spending, which will eventually … ease price pressures.”
Meta Platforms’ results also disappointed investors and put pressure on technology stocks on Thursday. The figures from Microsoft and Alphabet, expected after the close of the American markets, will be closely monitored.
A WALL STREET
Wall Street is falling after the latest American figures which raise fears that inflation will remain more persistent than expected.
At closing time in Europe, trading on the New York Stock Exchange indicated a drop of 1.6% for the Dow Jones, compared to 1.27% for the Standard & Poor’s 500, and 1.66% for the Nasdaq Composite.
VALUES
Hermès announced on Thursday a 17% increase in its sales at constant exchange rates in the first quarter, but warned of a slowdown for the rest of the year, and declined by 2.38%.
Dassault Systèmes reported on Thursday a 6% increase in its turnover in the first quarter, slightly below analysts’ forecasts, and lost 4.24%.
Sanofi reported on Thursday a drop of 14.7% in its operating income from activities in the first quarter, which nevertheless came out beyond expectations, which lifted the group by 4.47%.
Unilever recorded a 4.4% rise in underlying sales in the first quarter, above expectations, and advanced 5.41%.
Barclays reported a 12% fall in first-quarter profit on Thursday, in line with expectations, and rose 6.283%.
AstraZeneca on Thursday reported quarterly revenue and profit that beat market estimates, and jumped 5.78%.
BHP announced on Thursday that it had submitted a $38.8 billion takeover offer to Anglo American, which pushed Anglo American up 15.74%.
Sabadell exceeded forecasts for net profit in the first quarter, and soared by 7.60%.
Nestlé missed its organic sales growth forecast for the first quarter on Thursday and lost 2.28%.
Deutsche Bank on Thursday reported a 10% rise in first-quarter profit, a better-than-expected figure, and gained 8.26%.
RATE
Yields are rebounding in the United States and reaching their highest levels since November after the GDP figures and new jobless claims in the United States.
At the close of the European interest rate markets, the ten-year Treasury yield rose 4.6 bp to 4.6998%, compared to 5.6 bp for the two-year rate, to 4.9934%.
The German ten-year yield rose 3.7 bps to 2.623%, while the two-year yield rose 4.2 bps to 3.006%.
CHANGES
The dollar is falling as the latest GDP figures suggest activity has slowed more than expected, while the euro is strengthening, supported by the latest better-than-expected PMI indicators.
The dollar lost 0.15% against a basket of reference currencies, while the euro gained 0.17% to 1.0715 dollars. The pound sterling advanced 0.25% to $1.2492.
OIL
Crude is falling under pressure from the latest American indicators, which raise fears of weaker growth than expected and rates maintained at a restrictive level for longer than expected, which would weigh on demand.
Brent fell by 0.49% to $87.59 per barrel, American light crude (West Texas Intermediate, WTI) decreased by 0.69% to $82.24.
(Written by Corentin Chappron, edited by Sophie Louet)
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