Market: Decline in sight in Europe with fears related to China


PARIS (Reuters) – The main European stock markets are expected to fall on Monday at the opening, in the wake of Asian markets, after demonstrations in major Chinese cities against drastic restrictions linked to COVID-19, which reignited investor concerns. on the growth of the world’s second largest economy.

The first indications available give a decline of 0.5% for the Parisian CAC 40, 0.54% for the Dax in Frankfurt, 0.51% for the FTSE in London and 0.53% for the EuroStoxx 50.

Several hundred demonstrators clashed with police on Sunday evening in Shanghai as the protest movement against the “zero COVID” policy seems to have spread to many Chinese cities, a wave of disobedience unprecedented since Xi’s accession to power. Jinping in 2012.

“The scale of the demonstrations will inevitably lead to a response from Beijing (…) In addition to the risk of political instability, that linked to the epidemic continues to grow as winter approaches. Much more restrictions stringent restrictions coupled with economic upheaval are more likely in the coming weeks than a sudden easing of restrictions,” said Alvin Tan at RBC Capital Markets.

The number of new COVID cases in China hit an all-time high, with more than 40,000 new infections recorded on Sunday.

IN ASIA

The CSI 300 index of large caps in mainland China lost 1.84% and the Shanghai SSE Composite 1.39%. In Hong Kong, the Hang Seng fell by 2.16%.

Elsewhere, ZTE, Dahua Technology, Hikvision and Hytera Communications lost 2.35% to 2.95% after the Biden administration banned the sale of new telecom products on US soil over national security concerns. .

On the Tokyo Stock Exchange, the Nikkei lost 0.42%, also affected by the social and health situation in China.

AT WALL STREET

After a shortened session, the New York Stock Exchange ended in scattered order on Friday: the Dow Jones index gained 0.45%, or 152.97 points, to 34,347.03 points, the S&P-500, more broad, lost 1.14 points, or 0.03% to 4,026.12 points and the Nasdaq Composite fell 58.96 points (-0.52%) to 11,226.36 points.

The latter was penalized by poor performance from Apple, which fell 1.95% on reports that iPhone production at Foxconn’s factory in Zhengzhou, China, could fall by at least 30%. in November.

In this “Black Friday”, marked by promotional operations, distribution groups such as Target (-0.02%), Macy’s (+0.98%) and Best Buy (-1.41%) ended in dispersed order while the consumer discretionary index was up slightly (+0.06%).

Futures contracts signal a decline of 0.45% for the Dow Jones, 0.68% for the Standard & Poor’s-500 and 0.9% for the Nasdaq.

EXCHANGES/RATES

The greenback benefits from safe haven status and appreciates by 0.34% against a benchmark basket.

The latest developments in China halt the decline in the dollar index, which lost 0.9% last week on hopes that the Federal Reserve will soon slow the pace of its rate hikes, a scenario reinforced by the minutes. of its November meeting.

The euro fell 0.33% to 1.0361 dollars.

On the bond market, the yield on ten-year US Treasury bonds continued to decline, to 3.6424%, the lowest since early October.

OIL

The oil market is falling sharply due to fears for demand in China.

Brent fell 2.55% to $81.5 a barrel, after falling to a ten-month low of 81.16, and US light crude (West Texas Intermediate, WTI) 2.56% to 74, $33, after a low since December 2021 at 73.82.

(Laetitia Volga, edited by)

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