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Market: Europe’s stock market is moving forward with China, Wall Street closed


PARIS (Reuters) – European stock markets rose mid-session on Monday, supported by economic news from China considered encouraging, while American markets will remain closed for a public holiday in the United States.

In Paris, the CAC 40 gained 0.72% to 7,194.44 points at 12:00 GMT. In Frankfurt, the Dax takes 0.42% and in London, the FTSE gains 0.64%.

The pan-European FTSEurofirst 300 index is up 0.51%, the Eurozone EuroStoxx 50 is up 0.69% and the Stoxx 600 is up 0.61%.

US markets are closed for Martin Luther King Day and no major indicators are expected.

The publication in the morning of a less marked than expected slowdown in Chinese growth in the fourth quarter and the unexpected decision of the People’s Bank of China to lower its interest rates to limit the slowdown in the economy allow European indices to erase part of Friday’s decline.

Analysts expect a further easing of monetary policy from the Chinese institution, whose orientation would go even further against those of other major central banks, the US Federal Reserve in the lead.

The Fed’s monetary policy committee meets on January 25 and 26 and investors expect a rate hike cycle from March.

Before this meeting, the week which begins will be punctuated in particular by the publications of results of leading companies including those of Goldman Sachs, Bank of America, Netflix and ASML.

“One thing that was a very positive surprise for us last year, particularly towards the end of the year, was the strong performance of corporate margins,” said Marija Veitmane, senior strategist at State Street Global Markets. . “Companies have been able to pass on rising costs to the end consumer and that was very encouraging news for us. That’s exactly what we’ll be looking for this time around,” she added.

VALUES IN EUROPE

On the stock market, Renault took up 2.8% in session before reducing its gains to 0.49%, the French car manufacturer having published a drop in its global sales in 2021 but an increase in its sales to individuals, the more remunerative.

Pulling the FTSE 100 up, GlaxoSmithKline took 3.79% after rejecting an offer of 50 billion pounds (60 billion euros) from Unilever (-8.07%) on its consumer health business.

Credit Suisse drops 1.55% after it announced the resignation of its chairman, Antonio Horta-Osorio, following violations of restrictions against the COVID-19 pandemic.

As for analysts’ opinions, EDF lost 2% after the lowering of HSBC’s recommendation to “keep” while Publicis (+ 1.91%) benefited from an increase in UBS’s price target from 62 euros to 71 euros.

RATE

Eurozone benchmark yields are on the rise. That of the ten-year German Bund appears at -0.027%, up two basis points, and its French equivalent rises almost three points, to 0.352%, the highest since March 2020.

“The prospect of a Fed rate hike in March and the scale of the hike cycle keep the market under pressure… Bund and European government bond yields should follow the direction of those of the US Treasury,” Commerzbank analysts said.

The yield on ten-year Treasuries hit a two-year high last week, at 1.808%.

CHANGES

On the foreign exchange market, the dollar is stable against a basket of international currencies and the euro is trading at 1.1411 dollars.

OIL

Oil prices are changing without a clear trend, torn between the limitation of production by OPEC member countries and the increase in Libyan production.

Brent fell 0.24% to $85.85 a barrel after peaking since October 2018 at $86.71.

US crude (West Texas Intermediate) climbed 0.04% to $83.85 a barrel, after hitting $84.78, its highest level since November 10.

(Laetitia Volga, edited by)

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