by Claude Chendjou
PARIS (Reuters) – European stock markets ended in the green on Thursday and on Wall Street, two of the three main indices were also up against a backdrop of easing in the bond compartment after indicators pleading for monetary easing, as well as solid results of companies.
In Paris, the CAC 40 ended with a gain of 0.86% to 7,743.42 points after setting a record at 7,752.35. The German Dax, which also reached a historic peak during the session at 17,089.12 points, gained 0.56% at the close. The British Footsie advanced 0.38%.
The EuroStoxx 50 index increased by 0.67% and the FTSEurofirst 300 by 0.62%. The Stoxx 600, driven by the increase in Goldman Sachs’ price target to 510 points by the end of the year, gained 0.63%, after an unprecedented peak during the session at 488.86 points.
The positive trend in Europe was primarily driven by company publications, with the automotive sector gaining 1.99% to 668.97 points, at a nearly two-year high.
Monetary policy expectations also boosted stocks, with Christine Lagarde, the president of the European Central Bank (ECB), emphasizing to the European Parliament on Thursday that inflation was approaching the 2% target, while The European Commission has lowered its inflation forecast for this year to 2.7% compared to 3.2% previously.
VALUES IN EUROPE
Renault and Stellantis, which reported record results for the year 2023, lifted the CAC 40 with respective increases of 6.52% and 5.78%.
The spirits manufacturer Pernod Ricard gained 1.77% after reassuring its medium-term forecasts.
Orange (+1.14%) benefited from the group’s publication of earnings before interest, taxes, depreciation and amortization after rental (EBITDAaL) for 2023 above expectations.
Airbus lost 0.90% following forecasts for 2024 considered cautious despite the announcement of an exceptional dividend.
The Swedish Embracer fell 15.17% after a quarterly operating profit below forecasts, while Fortnox, another Swedish group, climbed 20.08% thanks to quarterly results better than expectations.
Commerzbank increased by 5.53%, the German bank having announced that it was targeting a further increase in its profit this year after recording its best result in 15 years in 2023.
A WALL STREET
At the close in Europe, the Dow Jones rose by 0.54% and the Standard & Poor’s 500 by 0.20%, while the Nasdaq lost 0.22%.
The sharper than expected decline in retail sales (-0.8%) and the unexpected drop in industrial production (-0.1%) in the United States in January are welcomed by investors who see it as proof of the he effectiveness of the transmission of the monetary tightening of the Federal Reserve.
The publications of Tripadvisor (+6.95%) and Occidental Petroleum (+3.94%) were also applauded, while those of Cisco Systems (-2.79%) and Deere (-5.29%) disappointed.
TODAY’S INDICATORS
Unemployment claims fell in the United States last week, to 212,000, compared to 220,000 (revised) the previous week.
Business conditions in the Philadelphia area rebounded unexpectedly in February, to 5.2 after -10.6 in January .
Manufacturing activity in the New York region recorded a smaller decline than expected in February, with its Empire State index falling to -2.4 from -43.70 in January.
RATE
The yield on the ten-year British Gilt lost all its gains, closing at 4.058% in Europe, after having fallen during the session to 3.974% following data showing that the British economy entered into recession at the end of 2023.
The ten-year German Bund yield ended practically stable, at 2.365%, in a volatile session where it fluctuated between 2.292% and 2.365%.
That of ten-year US Treasury bonds lost around 1.7 basis points, to 4.2535%, compared to a session low of 4.187%.
CHANGES
The mixed American statistics weigh on the dollar which weakens by (-0.23%) against a basket of reference currencies.
The euro is trading at $1.0756 (+0.29%) and the pound sterling at $1.2574 (+0.07%).
OIL
Oil prices are benefiting from the weakness of the dollar but fears about a slowdown in demand for crude are limiting gains. The International Energy Agency (IEA) said on Thursday that oil demand would peak by 2030 and revised its forecast for this year, expecting an increase of 1.22 million barrels per day ( bpd) compared to 1.24 million bpd previously.
Brent rose 1.85% to $83.11 per barrel and American light crude (West Texas Intermediate, WTI) rose 2.07% to $78.23, in a volatile session.
TO BE CONTINUED FRIDAY:
(Writing by Claude Chendjou, edited by Kate Entringer)
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