Europe’s stock market closes in the red

by Augustin Turpin

(Reuters) – European stock markets ended lower on Thursday as announcements from the European Central Bank (ECB), which opened the way to an easing of its monetary policy while maintaining its key rates, were not enough to reassure the markets in the face of doubts created by the persistent strength of inflation in the United States.

In Paris, the CAC 40 ended down 0.27% at 8,023.74 points. The British Footsie lost 0.47% and the German Dax 0.82%.

The EuroStoxx 50 index lost 0.72% and the FTSEurofirst 300 and Stoxx 600 both lost 0.44%.

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Among the rate-sensitive sectors, the real estate sector gained 0.2% while that of banks lost 2.3%.

At closing time in Europe, trading on the New York Stock Exchange indicated a drop of 0.2% for the Dow Jones, compared to gains of 0.2% for the Standard & Poor’s 500 and 0.7% for the Standard & Poor’s 500. % for the Nasdaq Composite.

The European Central Bank (ECB) on Thursday maintained its key rates at their current levels while paving the way for an easing of its monetary policy, while the positioning of the Federal Reserve risks complicating the easing process.

This is the ECB’s first reference to rate cuts since the start of its monetary tightening cycle.

“A few” members of the Governing Council even considered that it was already time to lower rates during the meeting preceding Thursday’s decision, confirmed the president of the institution, Christine Lagarde, during a conference Press.

“The ECB is increasingly optimistic that the conditions for monetary policy easing are coming into place,” said Mark Wall, an economist at Deutsche Bank Research.

“The question is whether the ECB’s current caution on domestic inflation means that back-to-back cuts in June and July are less likely,” he added.

The currency bloc is now in its sixth consecutive quarter of economic stagnation and the labor market is starting to soften, in stark contrast to the U.S. economy which continues to grow robustly.

VALUES

The European telecommunications compartment fell 2.1% in the wake of Deutsche Telekom, which fell 6.1% while its stock traded ex-dividend.

Lufthansa closed 2.7% lower after extending the suspension of its flights to Tehran, while Volvo lost 2.9% after Citigroup lowered its recommendation from “buy” to “neutral”.

In London, Idorsia collapsed 26.4% after postponing the publication of its financial results and AstraZeneca gained 2.1% after announcing an increase in its dividend in 2024.

TODAY’S INDICATORS

Jobless claims fell more sharply than expected last week in the United States, while producer prices (PPI) increased at a slower pace than expected year-on-year in March.

CHANGES

The dollar advances (0.14%) against a basket of reference currencies, while the euro loses 0.25% to 1.0715 dollars.

RATE

Bond yields in the euro zone are rising, as remarks from the ECB suggesting an upcoming easing of its monetary policy were not enough to offset fears of a postponement of the timetable for rate cuts in the United States.

The ten-year German Bund yield rose 5.0 basis points (bps) to 2.479%, while its two-year equivalent gained 1.7 bps to 2.961%.

The US bond markets are moving in a mixed order after the data on producer prices in March in the United States. The ten-year Treasury gained 1.4 bp to 4.5743% and the two-year Treasury lost 2.3 bp to 4.946%.

OIL

Oil prices are falling, with Brent hovering around $90, as investors weigh fears of an Iranian attack on Israeli interests against the likelihood of a delay in the timing of the rate cut. the Fed.

Brent dropped 0.71% to 89.84 dollars per barrel, American light crude (West Texas Intermediate, WTI) losing 1.04% to 85.31 dollars.

TO BE CONTINUED FRIDAY:

THE SITUATION ON THE MARKETS

(Some data may have a slight lag)

(Written by Augustin Turpin)