Market: Rebound in Europe after three sessions of decline


by Claude Chendjou

PARIS (Reuters) – European stock markets on Tuesday ended three consecutive sessions of decline in favor of cheap purchases, while on Wall Street the indices moved in disorder mid-term after the hearing in the Senate American Federal Reserve Chairman Jerome Powell, who confirms the institution’s desire to move towards a normalization of its monetary policy this year.

In Paris, the CAC 40 finished with a gain of 0.95% to 7,183.38 points. The British Footsie took 0.62% and the German Dax 1.1%.

The EuroStoxx 50 index advanced 0.99%, the FTSEurofirst 300 0.85% and the Stoxx 600 0.84%.

Speaking to the Senate Banking Committee ahead of his re-election as Fed leader, Jerome Powell said high inflation was a threat to the goal of a long economic expansion and that price stabilization was necessary.

While the publication on Friday of the monthly report on American employment showed an increase in the average wage above expectations, Jerome Powell said the institution was closely monitoring the matter.

Despite the rebound in equity markets in Europe, investors continue to be cautious about the high level of inflation.

Uncertainties over the COVID-19 pandemic and the recovery in the global economy are also fueling risk aversion.

The annual report of the GEF (ex-Davos Forum), made public on Tuesday, highlights four areas of emerging risks: cybersecurity, a disorderly climate transition, migratory pressures and the space race.

The World Bank, for its part, lowered its economic growth forecasts for the United States, the euro zone and China on Tuesday, and it warned of the risk of seeing public debts, widening inequalities and new variants of the coronavirus threaten recovery in emerging countries.

According to the World Health Organization (WHO), more than half of the European population should have been infected with the Omicron variant of the coronavirus within the next six to eight weeks.

In France, the Minister of Health, Olivier Véran, said he expected more than 350,000 new cases of contamination in the past 24 hours.

VALUES IN EUROPE

In Europe, the technology compartment (+ 1.9%), which has lost nearly 8% over the last seven sessions, posted the best progress of the Stoxx 600 in the wake of the rebound of the Nasdaq.

In France, TechnipFMC sold 1.71%, the oil services group having announced its upcoming withdrawal from the Paris Stock Exchange and the sale of around 5% of Technip Energies’ capital. The latter, which will buy back 1.8 million of its own shares, took 5.94%.

Eurazeo advanced 1.16%, the group having participated in a new round of funding which values ​​Back Market, a French marketplace specializing in the reconditioning of consumer electronics products, at 5.1 billion euros.

In Frankfurt, food delivery specialist Delivery Hero gained 4.95% after announcing that it is expected to break even in the second half of the year. Its competitor HelloFresh gained 0.99% after the announcement of a share buyback program of up to 250 million euros.

In Amsterdam, Aperam jumped 5.46%, Deutsche Bank being “to buy” on the value, citing strong momentum, excellent management and an expected rise in profits.

In decline, Carige plunged in Milan by 11.25%, its main shareholder having retained BPER Banca (+ 0.73%) to discuss a possible sale of the ailing bank.

A WALL STREET

At the time of the close in Europe, the Dow Jones was down 0.15%, while the Standard & Poor’s 500 was up 0.23% and the Nasdaq 0.82%.

After Jerome Powell’s speech to the Senate, technology stocks confirmed their rebound on Monday with an index up 1.1%, while financials and banks, which had largely benefited from expectations of a rate hike, catch their breath and are almost stable.

In values, Boeing gained nearly 3%. The American aircraft manufacturer has beaten its rival Airbus in the number of net orders for the year 2021, according to figures released on Tuesday.

CHANGES

On the currency market, the dollar index fell 0.31% against a basket of benchmark currencies after the hearing in the US Senate of Jerome Powell.

For Ricardo Evangelista, analyst at ActivTrades, the markets have already taken into account the change in the Fed’s position on its monetary policy.

The euro, up 0.34%, trades at $ 1.1364.

RATE

The yield on ten-year US Treasuries fell 1.8 basis points to 1.7622% after hitting a nearly two-year peak at 1.808% on Monday.

The yield of the German Bund with the same maturity ended practically stable at -0.033%, as did its French equivalent which closed at 0.294%.

OIL

Oil prices are trending up, supported in particular by the drop in crude stocks in Europe which fell 11% over one year in December, according to data from Euroilstock.

The situation in Kazakhstan has also stabilized and Libya has increased its oil production.

The barrel of Brent jumped 3.33% to 83.55 dollars and US light crude 3.71% to 81.14 dollars.

(Report Claude Chendjou, edited by Jean-Stéphane Brosse)

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