by Claude Chendjou
PARIS (Reuters) – European stock markets ended higher on Thursday and Wall Street was also in the green at mid-session amid investor enthusiasm over the prospects for monetary easing following the decisions of the American Federal Reserve (Fed) and the Swiss National Bank (SNB).
In Paris, the CAC 40 ended with a gain of 0.22% to 8,179.72 points and the German Dax advanced 0.91%. The British Footsie rose by 1.88%.
The EuroStoxx 50 index gained 1.04%, the FTSEurofirst 300 0.89% and the Stoxx 600 0.90%.
Most European stock indices set new records during the session in a context of appetite for risky assets and a decline in bond yields.
At the close in Europe, the Dow Jones advanced by 0.89%, the Standard & Poor’s 500 by 0.59% and the Nasdaq by 0.68%, the three indices also having reached unprecedented highs during the session.
Market enthusiasm is supported by announcements from the Fed, which confirmed on Wednesday that it still plans three rate cuts this year despite the strength of inflation and the economy across the Atlantic.
The Central Bank of Norway (Norges Bank) for its part suggested that monetary easing could take place in the autumn, while the Bank of England (BoE) stressed that the economy was heading in the direction of a reduction in borrowing costs. Without waiting, the SNB opted for a reduction in its key rate by 25 basis points.
“We believe that the balance of risks tilts in favor of faster action by the BoE (June rather than August),” write Nomura analysts, who also say they are surprised by the SNB’s decision.
“This market is hungry and reveling in information that will continue to fuel its rally and those two main areas, in my opinion, are the Fed and potential rate cuts, as well as AI,” observes Andre. Bakhos, president of Ingenium Analytics.
The forecasts announced by Micron Technology, which soared by 16.48%, also boosted the technology sector (+3.24%) in Europe and the semiconductor sector (+3.59%) on Wall Street. against a backdrop of enthusiasm for artificial intelligence.
Apple, however, fell by 3.60% while, according to sources, the competition authorities of the European Union will investigate the group, while the United States has decided to pursue the iPhone manufacturer for monopoly.
VALUES IN EUROPE
In Paris, Capgemini (-2.66%) suffered from the lowering of Accenture’s revenue forecast for the 2024 financial year (-8.98%).
Worldline advanced 4.02% after the announcement of the appointment of Wilfried Verstraete as future chairman of the group’s board of directors.
Rémy Cointreau rose 1.90% as Deutsche Bank moved from “hold” to “buy” on the spirits maker.
In London, Next rose 6.675% following a confirmation of its sales and profit forecasts for the current financial year.
In Frankfurt, BMW fell 1.47% after saying it anticipated an automotive EBIT margin for this year similar to that of 2023.
TODAY’S INDICATORS
Home resales in the United States increased in February to their highest level in a year, amid improving supply and falling housing rates.
Business conditions in the Philadelphia area increased unexpectedly in March to 3.2 from 5.2 in February, according to the monthly survey of the local branch of the Federal Reserve.
Unemployment claims fell in the United States last week, to 210,000 against 212,000 (revised) the previous week.
Private sector activity in the United Kingdom continued to recover but price pressure remained strong, with the “flash” composite PMI index rising to 52.9 this month from 53.0 in February.
Services activity in the euro zone improved in March but that of the manufacturing sector deteriorated with a “flash” composite PMI index at 49.9 this month compared to 49.2 in February.
The business climate in industry in France improved in March compared to the previous month, to 102 points, according to the survey published by INSEE.
CHANGES
The Swiss franc fell sharply on Thursday against the dollar, by 1.23% to 0.8977, and reached its lowest level since July 2023 against the euro, at 0.9787, in reaction to the SNB’s announcements.
The dollar rises by 0.70% against a basket of reference currencies.
The euro is trading at 1.0865 (-0.49%) and the pound sterling at 1.2669 dollars (-0.9%).
RATE
Sovereign yields in Europe ended down, with the German ten falling 3.8 basis points to 2.397% and the two-year 4.9 points, to 2.855%.
As the stock markets closed in Europe, the yields on ten-year and two-year US Treasuries had reversed, gaining approximately one basis point and three basis points, to 4.2808% and 4.632% respectively, after the publication of data showing the strength of the American economy.
OIL
The oil market is falling on data showing a decline in U.S. gasoline demand and reports of a draft United Nations resolution calling for a ceasefire in Gaza.
Brent lost 0.59% to $85.44 per barrel and American light crude (West Texas Intermediate, WTI) lost 0.69% to $80.71.
GOLD
The yellow metal hit a historic high on Thursday at $2,222.39 per ounce in the wake of the Fed’s announcements before falling 0.12% to $2,183.31 at the close of trading in Europe.
(Written by Claude Chendjou, edited by Sophie Louet)
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