by Claude Chendjou
PARIS (Reuters) – European stock markets, with the exception of London, ended higher on Thursday and Wall Street was also in the green at mid-session, as strong corporate results took precedence over fears linked to the inflation and expectations of monetary tightening in the United States.
In Paris, the CAC 40 ended with a gain of 0.3% to 7,194.16 points. The British Footsie, on the other hand, lost 0.06%. The German Dax gained 0.65%.
The EuroStoxx 50 index advanced 0.73%, the FTSEurofirst 300 0.51% and the Stoxx 600 0.51%.
The latest data from Refinitiv shows that Stoxx 600 companies are expected to post a profit up 48.6% year on year in the quarter to end December.
In the United States, Refinitiv expects the companies making up the S&P-500 index to post profits up 23.1% over one year over the October-December period.
Equity markets are also benefiting from the monetary easing measures announced on Thursday by the People’s Bank of China, whose policy is currently running counter to that of the US Federal Reserve which is meeting next week.
However, the high level of inflation remains a subject of concern for investors in Europe and the United States.
The increase in consumer prices in the euro zone was confirmed, in line with expectations, at 5% over one year in December, an unprecedented level.
According to the minutes published Thursday of the European Central Bank’s December meeting, members of its governing council noted a risk that inflation could continue beyond the institution’s target and argued that the central bank had to be open to a tightening as well as an easing of its monetary policy.
The central bank of Norway, for its part, announced Thursday that it could raise its key rate in March to support the recovery of the economy.
VALUES IN EUROPE
In Europe, the new technologies compartment (+1.4%), heckled in recent sessions by the rise in bond yields, has rebounded sharply. On the other side of the spectrum, that of energy, the only sector in the red, lost 0.4% after almost a month of rally.
In Paris, Vivendi (+1.4%) and Valneva (+19.7%) supported the trend, the first by taking advantage of the “buy” advice on the value of Goldman Sachs and the second by an announcement from the laboratory that its candidate vaccine against COVID-19 shows neutralization of the Omicron variant of the coronavirus.
On the downside, the railway manufacturer Alstom dropped 1.1% despite a turnover up 11% over nine months.
The biggest drop in the Stoxx 600, Soitec fell 18.2% after the announcement of the appointment of Pierre Barnabé, currently a senior executive at Atos, as head of the semiconductor materials manufacturer, replacing Paul Boudre.
In London, the meal delivery group Deliveroo (+1.4%) was driven by the increase in its orders in the fourth quarter.
In mergers and acquisitions, Unilever fell 0.5% after announcing that it would not raise its offer for the consumer health branch of GlaxoSmithKline (-1.7%).
In Frankfurt, Puma rose 1.2% on better-than-expected preliminary quarterly results despite supply chain issues.
AT WALL STREET
At the time of closing in Europe, the Dow Jones advanced by 1.14%, the Standard & Poor’s 500 by 1.3% and the Nasdaq by 1.8% thanks to solid corporate results.
American Airlines, which published a smaller loss than expected, gained 0.5% while the air transport compartment took 1.67%.
Travelers Companies, for its part, jumped 5.6% on the back of better-than-expected quarterly earnings per share.
The oil services company Baker Hughes, up 4.9%, published an adjusted profit for the fourth quarter against a net loss over the same period a year ago.
The technology compartment (+1.7%) also recovered before the results of Netflix (+1.3%) at the close of Wall Street.
CHANGES
In the foreign exchange market, the dollar is stable against a basket of international benchmark currencies, with bond yields in the United States catching their breath after a two-year high reached on Wednesday.
The euro retreated slightly to 1.1332 but remains below the 1.14 dollar mark crossed last week.
RATE
The yield on ten-year US Treasury bonds gained one point to 1.8379% after touching 1.902% the day before in the prospect of an acceleration of the tightening of Fed policy in the United States.
In Europe, the ten-year German Bund yield, which rose above zero on Wednesday in session for the first time since May 2019, fell 1.6 points to -0.025% on Thursday. Its French equivalent of the same maturity also contracted by 1.6 points to 0.363%.
OIL
The oil market continues to progress despite the peak since October 2014 reached on Wednesday.
The barrel of Brent takes 0.71% to 89.08 dollars and that of American crude (West Texas Intermediate, WTI) 0.79% to 87.65 dollars.
(Report Claude Chendjou, edited by Jean-Michel Bélot)
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