by Diana Mandia
(Reuters) – European stocks ended in disarray on Wednesday as investors pondered the path of monetary policies for 2023.
In Paris, the CAC 40 ended down 0.18% at 7,119.83 points, while the British Footsie recorded an increase of 0.26% and the German Dax of 0.6%.
The EuroStoxx 50 index ended unchanged, the FTSEurofirst 300 rose 0.2% and the Stoxx 600, which hit its highest level since April 2022 in early trading in the session, gained 0.28%.
Comments the day before by Federal Reserve Chairman Jerome Powell initially brought some relief, as the central banker pointed out that “inflation was starting to come down”.
But the respite was short-lived, and Wall Street fell at the close in Europe, while Jerome Powell also said it would take time to bring inflation back to near the level the Fed is aiming for.
In Europe, the European Central Bank (ECB), which raised interest rates by 50 basis points last week, could extend its series of significant rate hikes into May if core inflation does not decline. by then, warned Klaas Knot, member of the Board of Governors of the Frankfurt Institute, on Wednesday.
Knot also said he expects workers to gain wage bargaining power, with the economy holding up better than the ECB predicted just a few weeks ago.
VALUES
In Europe, the session was once again marked by a flurry of corporate results, particularly those in the energy and banking sectors.
The Norwegian Equinor took 6.8% thanks to an operating profit which more than doubled in 2022 compared to its previous record, and which comes the day after an equally historic annual profit for BP (+3 .2%). The profits of the big oil companies have more than doubled in 2022 to reach 204 billion euros.
Also in the sector, Finnish refining specialist Neste jumped 10% after a better than expected fourth quarter.
In the wake of these results, the oil and gas compartment ended up 1.66% on Wednesday.
The French giant TotalEnergies, which also published a record profit in 2022, however fell by 1.91%, analysts from Bernstein and Barclays citing quarterly adjusted net income below their expectations.
In the banking sector (+0.76%), Societe Generale fell 5.03%, as the lower-than-expected dividend proposal took precedence over the confirmation of 2025 objectives and a better than expected fourth quarter.
The Italian bank Monte Dei Paschi Di Siena (MPS) (-3%) also fell after its quarterly accounts, while those of Amundi and ABN Amro were greeted on the stock market by increases of 2.6% and 11.4% respectively.
The chemicals sector (+1.18%) posted the best performance on the Stoxx 600 on Wednesday, with Akzo Nobel up 1.03% and German industrial gas giant Linde up 3%.
Danish jeweler Pandora, which expects organic sales growth of between -3% and 3% this year after fourth quarter results beat analysts’ expectations, ended up more than 10%.
AT WALL STREET
The New York Stock Exchange is moving lower on Wednesday, investors fearing that the Federal Reserve (Fed) will continue raising its interest rates longer than expected.
At 5:10 p.m. GMT, the Dow Jones lost 0.46%, the Standard & Poor’s 500 fell 0.91% and the Nasdaq Composite lost 1.4%.
CHANGES
The dollar retreated slightly against a basket of international currencies after comments initially deemed accommodating by the Fed Chairman.
The euro took advantage of this to rise to 1.0735 dollars (+0.1%).
RATE
Yields on short-term euro zone government bonds rose again on Wednesday after the European Central Bank (ECB) decided the day before to cut its interest rate on deposits from governments and other public entities to induce governments of the euro area to reinject liquidity into the financial system.
Germany’s two-year government bond rate, the most sensitive to changes in interest rate and inflation expectations, climbed ten basis points to 2.711% after hitting earlier in the day. its highest level since January 3 at 2.725%.
Ten-year sovereign yields, less sensitive to interest rate expectations, reacted less markedly. The ten-year German Bund rate gained more than four basis points, to 2.359%.
Its American equivalent evolved for its part down one basis point, to 3.662%.
OIL
Oil prices rose Wednesday for the third consecutive session, supported by the decline in the dollar.
Data from the American Petroleum Institute (API), the main federation of hydrocarbon manufacturers, also shows that crude inventories in the United States fell by 2.2 million barrels last week, according to market sources.
Brent rose 0.31% to 83.95 dollars a barrel and US light crude (West Texas Intermediate, WTI) gained 0.41% to 77.46 dollars.
(Written by Diana Mandiá, edited by Blandine Hénault)
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