by Claude Chendjou
PARIS (Reuters) – European stock markets, apart from London, ended down on Tuesday, weighed down by risk aversion, the Bank of Japan (BoJ) having surprised the markets by authorizing a slight increase in its interest rates, while that in New York, two of the three main indices resisted the downward trend at mid-session thanks in particular to the gains in the energy and financial sectors.
In Paris, the CAC 40 ended down 0.35% at 6,450.43 points. The German Dax lost 0.42%. The British Footsie, on the other hand, gained 0.13%, thanks in particular to energy stocks.
The EuroStoxx 50 index fell by 0.23%, the FTSEurofirst 300 by 0.36% and the Stoxx 600 by 0.4%.
Engaged since 2013 in a fight against deflation, the BoJ surprised the markets by announcing, at the end of its two-day monetary policy meeting, that it would allow an upward fluctuation in the yield of its ten bonds years at a maximum of 0.5% against a ceiling previously set at 0.25%.
This decision, even measured, is perceived by analysts as the beginning of a gradual abandonment of the ultra-accommodating policy of the Japanese central bank, whose strategy runs counter to that of the other major central banks which have since the end of the peak of the COVID-19 crisis, sustained monetary tightening to curb persistent inflation.
In financial markets, the benchmark Nikkei index fell 2.46%, the lowest since October 13, and the yield on ten-year bonds hit a high since 2015 at 0.47%, very close to the BoJ’s new implicit ceiling.
Bond yields in Europe and the United States followed suit: the ten-year German Bund ended on a gain of 10.1 points to 2.29%, the fifth session in a row of increases.
Its American equivalent of the same maturity was displayed at the close of the stock markets in Europe at 3.XX%, up X points, while the money markets assess with a probability of 61% a rate hike by the Fed in February. by 25 basis points, to 4.5%-4.75%, before a peak in the cost of credit at 4.9% by May 2023.
AT WALL STREET
At the close in Europe, the Dow Jones advanced 0.14%, while the Standard & Poor’s 500 was virtually unchanged and the Nasdaq lost 0.15%.
The positive trend is driven by the energy (+1.39%) and finance (+0.61%) indices, the first benefiting from a decline in the dollar and the second from the continued rise in bond yields.
In stocks, Tesla, which ended in the red on Monday, fell another 5.24% after the automaker’s price target was lowered to a range of $177 to $285 by several intermediaries amid concerns. on request. Investors also fear that Elon Musk, CEO of Tesla, pays too much attention to Twitter to the detriment of the management of the automotive group.
Nike fell 0.97% ahead of its quarterly earnings release after the close.
Wells Fargo dropped 1.32% after a $3.7 billion fine imposed by the Consumer Financial Protection Bureau (CFPB), the US federal consumer protection agency, for mismanagement.
VALUES IN EUROPE
In Europe, automotive (-1.44%), tourism (-0.64%), real estate (-2.15%) and new technologies (-1.21%) were among the most sharp declines amid fears of a recession and a sustained rise in interest rates.
The prospect of an increase in the cost of credit, on the other hand, pulled the banks, whose index gained 1.65%, the best performance of the Stoxx 600.
In individual values, Elior gained 3.87% after the announcement of the signing of a protocol for the acquisition of the Multiservices division of its main shareholder Derichebourg (-1.56%).
Engie, invited by the Belgian authorities to increase its nuclear provisions by 3.3 billion euros, lost 3.30%.
Orange lost 0.97% after the announcement of the departure of its chief financial officer, Ramon Fernandez, scheduled for the end of the first quarter of 2023.
CHANGES
On the foreign exchange market, the US currency hit a low against the Japanese currency at 131.01 yen per dollar after the announcements of the BoJ, against 136.89 at the opening of trading.
Against a basket of benchmark currencies, the greenback lost 0.69%, while the euro advanced 0.23% to 1.0629 dollars.
OIL
Oil prices are volatile due to a weaker dollar and an increase in cases of contamination linked to the COVID-19 epidemic in China.
At the close of trading in Europe, Brent fell 0.66% to 79.27 dollars a barrel and American light crude (West Texas Intermediate, WTI) lost 0.31% to 74.96 dollars while the two benchmarks oil have previously spent a good part of the session in the green.
(Written by Claude Chendjou, edited by Jean-Stéphane Brosse)
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