PARIS (Reuters) – European stock markets ended mixed on Tuesday in a context of uncertainties over rates and the European economy, but supported by the decline in oil prices and sovereign yields.
In Paris, the CAC 40 lost 0.39% to 6,986.23 points, while the German Dax gained 0.11% and the British Footsie fell 0.10%.
The EuroStoxx 50 index ended the session down 0.13%, compared to 0.14% for the FTSEurofirst 300 and 0.16% for the Stoxx 600.
The optimism that gripped investors after the last meeting of the Federal Reserve, and which raised hopes of a significant rate cut in 2024, is starting to dissipate.
Several U.S. policy makers are expected this week, including Fed Chairman Jerome Powell on Wednesday, and their statements will help clarify the path of rates.
However, Minneapolis Fed President Neel Kashkari and Board of Governors member Christopher Waller warned on Tuesday that the resistance of the US economy must be monitored, with Neel Kashkari even adding that this resistance could justify further rate hikes .
Furthermore, investors are worried about the risks of recession in the euro zone: industrial production in Germany, the bloc’s largest economy, has fallen more sharply than consensus expected, while the vice-president of the Bank European Central, Luis de Guindos, warned that the institution predicted a contraction or stagnation of the gross domestic product of the zone in the fourth quarter.
Exports to China are also down, raising concerns about the state of global activity.
Risky assets nevertheless benefited from the decline in oil prices and the fall in sovereign yields on Tuesday.
VALUES
The energy sector ended with a decline of 2.47%, the worst performance of the Stoxx 600 sectors, driven by the decline in crude prices.
Engie advanced 1.07% after publishing improved results on Tuesday for the first nine months of 2023, and announcing an upward revision of its annual objectives.
Edenred fell 4.29% after the sale by a shareholder of a block of 2% of the group’s capital.
UBS rose 1.83% as the group highlighted on Tuesday the stabilization of its wealth management activities, despite a loss of $785 million for the third quarter due to a charge of $2.1 billion related to to the takeover of Credit Suisse.
Telefonica announced on Tuesday that it would launch a public takeover offer for the 28.19% of Telefonica Deutschland that it does not own, at a price of 2.35 euros. Telefonica Deutschland jumped 37.86% to 2.354 euros after the announcement.
A WALL STREET
Wall Street is benefiting from the bond rebound and progressing in a wait-and-see environment.
At closing time in Europe, trading on the New York Stock Exchange indicated an increase of 0.2% for the Dow Jones, compared to 0.30% for the Standard & Poor’s 500 and 1.03% for the Nasdaq. Composite.
RATE
European yields fell after the publication of German industrial production, which fell more than expected in September and raised fears of a recession in the euro zone in the fourth quarter.
At the close of the European interest rate markets, the ten-year Treasury yield lost 7.3 bps to 4.5892%, while the two-year rate declined by 1.3 bps to 4.928%.
The yield on the German ten-year fell 7.1 bps to 2.667%, while that of the two-year rate fell by 2.3 bps to 3.069%.
CHANGES
The euro declines after the publication of German industrial production, while the rebound of the dollar continues, the greenback having declined sharply last week in a context of stronger risk appetite. The dollar rose 0.33% against a basket of reference currencies, while the euro lost 0.28% to 1.0685 dollars. The pound sterling fell 0.38% to $1.2294.
OIL
Crude oil plunges to its lowest in more than two months after the publication of mixed Chinese export data, which raised fears of a contraction in activity in the world’s largest oil importer. Brent fell 2.89% to $82.72 per barrel, American light crude (West Texas Intermediate, WTI) fell 2.87% to $78.5.
(Written by Corentin Chappron, edited by Kate Entringer)
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