(Reuters) – European stocks ended higher on Monday as the confirmation of the lifting of the lockdown in Shanghai prolonged the revival of risk appetite, while the strength of inflation in the euro zone supported a rise in bond yields .
Trading volumes were however reduced by the absence of most American investors, the day being a public holiday in the United States for “Memorial Day”.
In Paris, the CAC 40 gained 0.72% (46.64 points) to 6,562.39 points, its best closing since April 22. In London, the FTSE 100 advanced 0.19% and in Frankfurt, the Dax gained 0.79%.
The EuroStoxx 50 index ended up 0.86%, the FTSEurofirst 300 0.58% and the Stoxx 600 0.59%.
The latter thus reduces its decline since the beginning of May to 0.85%, while the MSCI world index is now posting a positive monthly performance.
Shanghai authorities confirmed that the lockdown imposed on the city’s population for two months in an attempt to curb the resurgence of the COVID-19 epidemic would be lifted on Wednesday, which should speed up the return to normal daily life. as economic activity.
The news comes on top of ebbing concerns about the US Federal Reserve raising interest rates after indicators suggested US inflation may have peaked.
The concern aroused by the surge in consumer prices is far from having disappeared, however, as shown by the publication of the first inflation figures in May in Spain and Germany, at 8.7% on a year in both cases.
RATE
These figures, which are likely to relaunch the debate within the European Central Bank (ECB) on the advisability of raising rates by half a point in July, favored a marked rise in bond yields in the euro zone: that of the German ten-year Bund took more than eight basis points on the day to 1.054%, its highest since May 18, its French equivalent eight points to 1.564% and the Spanish almost ten points to 2.123%.
Money markets are currently pricing in a 110 basis point hike in the ECB deposit rate by the end of the year.
“It wouldn’t be reasonable to rule out a 50 basis point rate hike in July, but it’s pretty clear there’s no consensus in the board of governors for a hike of that magnitude,” he said. Chris Attfield, European rate strategist at HSBC.
CHANGES
The acceleration of inflation also benefits the euro, which appreciated by 0.48% against the dollar to 1.0778, its highest since April 25.
The greenback is suffering more broadly from investors’ renewed interest in riskier assets: it is down 0.34% against a benchmark basket.
The US currency, down nearly 1.5% since the beginning of the month, is thus heading towards its first negative monthly performance since February.
VALUES
The sharp rise in the US Nasdaq on Friday and the prospect of a continued rebound on Tuesday benefited European technology stocks, whose Stoxx index closed with a gain of 1.99%.
The prospect of a total lifting of health restrictions in China has also favored luxury stocks, a sector very exposed to the Chinese market: in Paris, Hermès, Kering and LVMH took between 2.5% and 4%.
In Frankfurt, Siemens rose 2.43% after winning an 8.1 billion euro contract to build high-speed rail links in Egypt.
Down, Sanofi sold 1.91% after the postponement by the US Food and Drug Administration (FDA) of the launch of a trial for the over-the-counter marketing of Cialis, a treatment for erectile dysfunction.
OIL
The price of a barrel of crude remains on the rise despite the apparent difficulties of the European Union to reach a compromise allowing the banning of the import of Russian oil.
Brent crude gains 1.2% to $120.86 a barrel after climbing above $120 for the first time since March 25 and US light crude (West Texas Intermediate, WTI) takes 1.03% to 116 $.26.
(Written by Marc Angrand, with Stefano Rebaudo, edited by Jean-Michel Bélot)
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