by Claude Chendjou
PARIS (Reuters) – European stocks ended higher on Friday, supported by a stimulus measure in China, but Wall Street was moving lower at mid-session, overtaken by fears over inflation and the risk of recession in the States States which weigh since the beginning of the week on the indices.
In Paris, the CAC 40 ended up 0.2% at 6,285.24 points. The British Footsie advanced 1.19% and the German Dax 0.72%.
The EuroStoxx 50 index gained 0.45%, the FTSEurofirst 300 0.65% and the Stoxx 600 0.73%.
Over the week as a whole, the Parisian index however lost 1.21%, while the Stoxx 600 fell by 0.55%.
The People’s Bank of China (PBOC) cut its five-year prime lending rate, which serves as a benchmark for China’s mortgage market, by 15 basis points to 4.45%, as economists expected a decrease. only five to ten points.
“The reduction in the prime lending rate (TPP) to five years should help revive home sales,” said Julian Evans-Pritchard of Capital Economics in a note.
The unexpected rise in retail sales in the United Kingdom in April (+1.4%) also supported equity markets in Europe and allowed investors to temporarily put aside concerns about inflation.
Producer prices in Germany jumped 33.5% in April year on year, a record high, amid soaring energy costs, official data showed on Friday.
VALUES IN EUROPE
In Europe, the new arrivals from China mainly drove the energy (+0.49%), automotive (+0.46%) and new technologies (+0.54%) compartments. Only cyclical consumption (-0.65%) finished in the red.
Worldline and Capgemini each gained more than 1%, while Renault and Stellantis finished in the green.
The luxury sector, although exposed to China, was neglected, Richemont having published results deemed disappointing and mentioned the risk of a prolonged slowdown in the second largest economy in the world.
The owner of the Cartier brand fell by 13.10%, dragging in its wake Hermès, LVMH, or even Hugo Boss, which fell from 1.3% to 2.1%.
Air France-KLM advanced 1.05% following the announcement of discussions with Apollo Global Management with a view to an investment of 500 million euros by the latter.
EDF took 1.35% despite new delays and additional costs in the construction of the EPR reactors at Hinkley Point, in the United Kingdom, the news being already integrated into the courses according to analysts.
In decline, the Swiss insurer Zurich Insurance (-0.4%) announced the sale of its activities in Russia.
AT WALL STREET
At the close in Europe, the Dow Jones fell 0.77%, the Standard & Poor’s 500 0.83% and the Nasdaq 1.03%.
Alphabet and Tesla yielded 1.9% and 6% respectively, while the new technologies sector index dropped 0.64%.
The specialist in equipment and materials for the semiconductor sector Applied Materials plunged nearly 5% after the announcement of results below expectations for the current quarter.
The distribution sector, already penalized in the last two sessions by Walmart and Target, fell further, by 1.6%, despite the support offered by Foot Locker (+ 1.8%), which reported a profit quarterly better than expected.
The world’s leading manufacturer of agricultural equipment Deere & Co for its part fell by 11% after quarterly sales fell below consensus.
The dollar rose 0.37% against other major currencies but is expected to fall 1.5% for the week as a whole, its worst weekly performance since February, after a 10% gain in 14 weeks.
The euro, down 0.35% at $1.0548, is heading for a 1% gain for the week as a whole.
The pound sterling, which is trading at 1.2465 dollars, should gain 1.6% over the week, its best performance since the end of 2020.
The yield on the ten-year German Bund, a benchmark for the European market, rose slightly to 0.943% as money markets now expect a half-point rise in rates from the European Central Bank in July.
Joachim Nagel, member of the Governing Council of the ECB and President of the Bundesbank, considered that it was of the utmost importance, as far as he was concerned, to begin the process of raising rates as early as July. François Villeroy de Galhau, Governor of the Banque de France, assured for his part that the central banks of the G7 were determined to fight against inflation.
In the United States, the yield on ten-year Treasuries fell for the third consecutive session, to 2.8153%, due to concerns about growth.
Oil prices are not changing much and should show virtual stability throughout the week, with investors torn between the risk of a slowdown in global growth and fears over supply.
The barrel of Brent advances by 0.38% to 112.52 dollars, while that of American light crude (West Texas Intermediate, WTI) gains 0.39% to 112.65 dollars.
(Report Claude Chendjou, edited by Jean-Michel Bélot)
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