by Claude Chendjou
PARIS (Reuters) – European stocks ended lower on Wednesday after a volatile session while Wall Street also fell in late morning in New York, investors continuing to show caution after the pessimistic forecasts of several major American banks on the evolution of the United States economy.
In Paris, the CAC 40 ended down 0.41% at 6,660.59 points. The British Footsie lost 0.43% and the German Dax 0.57%.
The EuroStoxx 50 index fell by 0.46%, the FTSEurofirst 300 by 0.64%. The Stoxx 600 closed down 0.62% for a fourth straight session in the red.
China’s announcement of ten new measures to ease health restrictions after unprecedented protests against its “zero COVID” policy was not enough to restore appetite for risky assets.
A week before the monetary policy meeting of the American Federal Reserve (Fed) and that of the European Central Bank (ECB), fears about rates and the evolution of the economy dominated the exchanges.
Especially since the Bank of Canada surprised on Wednesday by raising its rates by 50 basis points to 4.25%, the highest level in nearly 15 years. But she hinted that the cycle of monetary tightening in Canada was soon coming to an end.
In terms of economic forecasts, the leaders of Goldman Sachs, JPMorgan Chase and Bank of America warned on Tuesday that inflation would weigh on consumers’ purchasing power next year and that a recession was likely in the United States, which which continued to fuel caution in the financial markets.
The CBOE index measuring volatility rose in session in the United States to a two-week high, at 23 points, and its European equivalent ended with a gain of 5.85% to 22.02 points.
VALUES IN EUROPE
Among the major sectors of the European dimension, the health compartment stood out with an increase of 0.7% thanks in particular to Sanofi (+6.10%) and GSK (+7.53%) which benefited from a court decision on Zantac, a treatment for stomach acidity accused of being carcinogenic.
On the other hand, the basic resources compartment (-1.66%) and that of energy (-1.96%) were penalized by fears about the global economy: oil companies TotalEnergies (-2.04 %), BP (-2.24%) and Eni (-1.51%), as well as the mining groups Anglo American (-1.639%), Glencore (-2.84%), Rio Tinto (-1.12 %) and Eramet (-1.34%) ended in the red.
In other sectors, Airbus fell 2.2% after announcing the cancellation of its aircraft delivery forecast for this year, while Renault closed down 0.62% after announcing the departure of the general manager of the group’s new mobility brand, Clotilde Delbos.
AT WALL STREET
At the close in Europe, the Dow Jones fell 0.03%, the Standard & Poor’s 500 0.21% and the Nasdaq 0.54%.
Only four of the 11 major sectors of the S&P-500 are in the green, with healthcare (+0.63%) leading while new technologies (-0.67%) show the biggest decline.
Values Tesla, still affected by fears of a drop in production at its Shanghai factory, fell for the third session in a row, by 3.90%.
Apple dropped 1.38%, Morgan Stanley having reduced its target for iPhone shipments in December due to the setbacks in China of Foxconn, the group’s subcontractor at the apple.
THE INDICATORS OF THE DAY
Economic growth in the euro zone in the third quarter was however stronger than previously announced, by 0.3% compared to the second quarter and 2.3% year on year, Eurostat data show.
In Germany, industrial production contracted in October, by 0.1%.
France’s trade balance deficit came out in October at -12.15 billion euros.
China’s imports and exports fell sharper than expected in November amid falling global demand and the COVID-19 outbreak, official data showed.
CHANGES
In foreign exchange, the dollar fell 0.35% against a basket of benchmark currencies as traders assess the uncertainties weighing on the economy.
The volatile euro rose to 1.0499 dollars (+0.29%) after falling in the morning.
RATE
Bond yields in Europe ended lower after an ECB survey showed consumer inflation expectations in the eurozone 12 months ahead were revised up again in October while those looking ahead three years have remained unchanged.
The ten-year German Bund yield fell 1.2 basis points to 1.78%, and the two-year German Bund fell 4.1 points to 2.01%.
The yield on ten-year US government bonds, for its part, fell about five points, to 3.46%, and that to two years 7.3 points, to 4.35%.
OIL
Oil prices fell due to an unexpected increase in crude inventories in the United States while uncertainties about the economy are already weighing on demand.
Brent fell 1.61% to 78.07 dollars a barrel after falling in session to 77.7 dollars, the lowest since January 3.
American light crude (West Texas Intermediate, WTI) fell 2.06% to 72.72 dollars a barrel.
(Written by Claude Chendjou, edited by Kate Entringer)
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