PARIS (Reuters) – European markets ended mixed on Friday as oil advanced, supported by geopolitical tensions.
In Paris, the CAC 40 lost 0.16% to 8,010.83 points, while the German Dax fell 0.28% and the British Footsie rose 0.91%, supported by the energy and raw materials.
The EuroStoxx 50 index ended the session down 0.37%, compared to an increase of 0.13% for the FTSEurofirst 300 and 0.06% for the Stoxx 600.
Over the week, the CAC 40 lost 0.47% and the Stoxx 600 0.39%.
The rise in the price of oil put pressure on the stock markets, with the barrel reaching its highest level since October during the session.
Oil market operators are worried about tensions in the Middle East, as Iran has vowed revenge for the strike on its Damascus embassy, attributed to Israel. The risks of a geopolitical shock during the weekend, a period when the markets are closed, encourages operators to position themselves with caution.
However, if a more expensive barrel can put pressure on activity and complicate the outlook for companies, the markets above all fear that the rebound in crude oil will revive inflationary pressures, while the price dynamics surprised this week in the United States. United and central banks are preparing to lower their rates.
The more general rise in the price of raw materials worries investors: during Friday’s session, copper reached its highest level since June 2022, silver reached a three-year record and gold a sustained historic high. by the demand for safe haven assets.
“Since the start of the month, the Bloomberg Commodity Total Return index is up 4.4%, with solid gains in all sectors,” except cereals, underlines Ole S. Hansen, head of commodities research. at Saxo Bank.
The markets are also repositioning themselves, with investors expecting fewer rate cuts from the Federal Reserve than expected at the start of the year.
“This week, the trends observed last week continued: rising yields, widening spreads, falling equities in developed markets,” notes Florian Ielpo, head of research at Lombard Odier IM.
“The main driver of these movements was the resurgence of inflationary fears, reignited once again by an inflation report that turned out to be stronger than expected.”
OIL
Crude oil progresses, supported by geopolitical tensions, and hits a six-month high during the session.
Brent strengthened by 1.28% to $90.89 per barrel, American light crude (West Texas Intermediate, WTI) advanced by 1.49% to $86.29.
RATE
Yields fell sharply on both sides of the Atlantic as investors reassessed their monetary policy expectations and purchased safe-haven assets.
At the close of the rate markets in Europe, the ten-year Treasury yield fell 6.3 bp to 4.5135%, compared to 7.1 bp for the two-year rate, to 4.8902%.
The German ten-year yield fell 11.8 bps to 2.358%, while the two-year yield fell 11.2 bps to 2.858%.
A WALL STREET
Wall Street is declining, with markets worried about persistent inflation in the United States and geopolitical tensions.
At closing time in Europe, trading on the New York Stock Exchange indicated a drop of 0.78% for the Dow Jones, compared to 0.98% for the Standard & Poor’s 500, and 1.02% for the Nasdaq Composite.
VALUES
The rise in oil supported energy-related stocks, with the commodities sector rising 2.38%. TotalEnergies gained 2.05%, Engie 1.7%, BP advanced 3.673% and Shell 3.01%.
The raw materials sector increased by 2.42%, as the prices of basic resources continued to rise. Glencore notably gained 5.10%, one of the best performances in the Stoxx 600.
Société Générale advanced 2.1% after announcing on Friday the conclusion of an agreement with the Moroccan conglomerate Groupe Saham for the sale of two of its subsidiaries in the country, as part of a transaction estimated at €745 million. euros.
CHANGES
The dollar is strengthening and heading for its best weekly performance since September 2022, while gold hits a record high, with both assets benefiting from demand for safe-haven assets.
The dollar gained 0.62% against a basket of reference currencies, while the euro lost 0.74% to 1.0645 dollars. The pound sterling fell 0.76% to 1.2455 dollars.
Gold rose 0.74% to $2,390.89 per ounce, after hitting a record of $2,431.29.
TO BE CONTINUED ON MONDAY:
(Written by Corentin Chappron, edited by Sophie Louet)
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