by CORENTIN CHAPRON
PARIS (Reuters) – European stock markets ended higher on Wednesday in a session rich in publications and events, including a speech by Federal Reserve Chairman Jerome Powell to Congress, before other important meetings this week.
In Paris, the CAC 40 gained 0.28% to 7,954.74 points, while the German Dax gained 0.1% and the British Footsie 0.43%.
The EuroStoxx 50 index ended the session with an increase of 0.5%, compared to 0.37% for the FTSEurofirst 300 and 0.39% for the Stoxx 600.
Investors digested a series of data on Wednesday, in the euro zone and the United States.
In Europe, retail sales were in line with expectations in January, but two German economic institutes lowered their growth forecasts for Germany as the country faces a cost-of-living crisis.
The presentation of the budget across the Channel animated the British markets.
In the United States, several indicators have encouraged investors to bet on monetary easing this year.
The ADP and Jolt surveys showed that tensions on the job markets were beginning to dissipate, while these same tensions contributed significantly to the persistence of inflation in the United States in 2023.
Above all, the comments of the Chairman of the Federal Reserve, Jerome Powell, who spoke before the Financial Services Committee of the House of Representatives, were considered accommodating, the head of monetary policy confirming in particular that the American economy should succeed in soft landing and that the central bank would lower its rates this year.
The Fed’s Beige Book, expected at 7:00 p.m. GMT, should confirm the Fed Chairman’s comments.
The rest of the week remains busy for investors. The ECB meeting on Thursday will make it possible to gauge the extent to which the slowdown in the European economy is helping to bring inflation back to its target.
In the United States, the official employment report published Friday by the Department of Labor could support the confidence displayed by the president of the Fed during his hearing by Congress.
EXCHANGE/GOLD
Comments from Jerome Powell and the latest employment indicators, which suggest that tensions in labor markets are dissipating, put pressure on the dollar and took gold to a record for the session.
Gold advanced 0.82% to $2,144.99 an ounce, after reaching a high of $2,147.60 earlier in the session.
The dollar lost 0.5% against a basket of reference currencies, while the euro gained 0.53% to 1.0912 dollars. The pound sterling rose 0.43% to $1.2757.
VALUES
Scor climbed 8.24% thanks to increased net profit in the fourth quarter and the announcement of the payment of a dividend to shareholders.
Dassault Aviation fell 5.43% after reporting lower order intake and deliveries in 2023.
DHL Group fell 6.28% after announcing lower than market forecasts for 2024.
Symrise, maker of flavors and fragrances, advanced 6.59% thanks to operating profit above expectations for 2023.
Fincantieri jumped 7.16% after several Italian newspapers reported that the group was in discussions with Leonardo, the shipbuilder wishing to buy the submarine division of the defense group for 200 to 300 million euros.
Pirelli said on Wednesday it expects revenue growth of just over 5% by next year, sending the stock down 3.48%.
Irish bank AIB Group announced on Wednesday its intention to return 1.7 billion euros to shareholders after more than doubling its profit after tax for the whole year, putting the group ahead by 5.02 %.
Travel company TUI gained 9.12% after Morgan Stanley raised its recommendation from “online weighting” to “overweight”.
A WALL STREET
Wall Street is moving forward, relieved by Jerome Powell’s less restrictive tone than expected.
At closing time in Europe, trading on the New York Stock Exchange indicated an increase of 0.67% for the Dow Jones, compared to 0.85% for the Standard & Poor’s 500, and 0.8% for the Nasdaq Composite.
RATE
American long yields are eroding after the latest indicators.
At the close of the European interest rate markets, the ten-year Treasury yield fell by 2.1 bp to 4.1156%.
The yield on the German ten-year rose by 1 bps to 2.329%, while that of the two-year rate rose by 3.3 bps to 2.8722%.
OIL
Jerome Powell’s remarks support oil prices, which also benefit from the publication of data showing a less strong increase than expected in weekly crude stocks in the United States.
Brent strengthened by 1.86% to $83.57 per barrel, American light crude (West Texas Intermediate, WTI) gained 2.39% to $80.02.
(Written by Corentin Chappron, edited by Blandine Hénault)
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