by Augustin Turpin
(Reuters) – European stock markets ended in mixed order on Tuesday, catching their breath after the increases recorded last week, in a context of wait-and-see and while Chinese investors timidly received the possibility of implementing a plan large-scale rescue by Beijing.
In Paris, the CAC 40 ended down 0.34% at 7,388.04 points. The British Footsie gained 0.08% and the German Dax lost 0.3%.
The EuroStoxx 50 index lost 0.3%, the FTSEurofirst 300 0.27% and the Stoxx 600 0.26%.
At closing time in Europe, the Dow Jones lost 0.5%, the Standard & Poor’s 500 0.1% and the Nasdaq Composite 0.1%.
After several days of clear optimism on the markets, with a record S&P to boot, the climate is now one of wait-and-see, with investors awaiting the succession of indicators and monetary policy meetings planned in the coming days for to position yourself.
The main event expected during the day, the Bank of Japan’s monetary policy meeting, ended without surprise, the central bank having maintained its ultra-accommodative posture.
The surprise came from the publication by Bloomberg of reports according to which Chinese authorities are considering taking new measures, including the mobilization of around 2,000 billion yuan (257.35 billion euros), to stabilize a domestic stock market in difficulty.
The news led to only a moderate rally in Chinese stocks, which hit a five-year low on Monday.
There is little risk that the type of aggressive selloff that hit Chinese markets this week will spread to other parts of the financial world, according to Samy Char, an analyst at Lombard Odier.
“This is a surplus economy. There are a lot of savings in the private sector. So there is no risk of financial contagion and failure of the financial system,” he said.
“They have sufficient room for maneuver and savings to avoid a financial accident. What we cannot avoid is having to digest excesses, which implies taking losses” , he added.
In Europe, the community services sector, sensitive to interest rates, fell by 0.84%, while the mining sector jumped by 1.91%.
Rising bond yields also weighed on trading, with the yield on the 10-year German Bund hitting its highest level in seven weeks.
VALUES
The TF1 stock closes at the top of the CAC40, up 7.6% after an increase in Oddo’s recommendation to “outperform”, the intermediary highlighting the improvement in the group’s prospects after the launch of the streaming platform. TF1+.
TODAY’S INDICATORS
Euro zone consumer confidence fell 1.0 points in January from the previous lowest, according to Commission figures released on Tuesday, with the “flash” estimate also showing that consumer sentiment had fallen to -16 .1 this month, compared to -15.1 in December.
CHANGES
The greenback rose (0.36%) against a basket of reference currencies and reached its six-week high around 3:48 p.m. GMT, while the euro lost 0.46% to $1.0831.
RATE
Euro zone bond yields are rising, with the yield on the 10-year German Bund hitting its highest level in seven weeks, as investors secure their bets on an early rate cut ahead of the ECB’s policy meeting on Thursday.
The German ten-year yield gained 5.4 basis points (bps) to 2.344%, with the two-year rate gaining 1.9 bps to 2.71%.
The US bond markets are also progressing, with the ten-year bond market gaining 5.9 bps to 4.1531%.
OIL
Oil prices are slowing their rise, as investors weigh tensions in the Middle East against supply disruptions in the United States and the resumption of production in Libya.
Brent rose 0.11% to $80.15 per barrel, with American light crude (West Texas Intermediate, WTI) increasing 0.39% to $75.05.
(Written by Augustin Turpin, edited by Zhifan Liu)
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