Market: Risk aversion penalizes global equities


by Laetitia Volga

PARIS (Reuters) – Wall Street is expected to drop on Monday at the opening and European stock markets retreat sharply mid-session as investors fear rising COVID-19 cases and new restrictions will further dampen growth global economy.

New York index futures signal a Wall Street opening down 0.9% to 1.2%.

In Paris, the CAC 40 dropped 0.92% at 6,863.15 at 12:14 GMT. In Frankfurt, the Dax lost 1.55% and in London, the FTSE lost 0.98%.

The pan-European FTSEurofirst 300 index fell by 1.32%, the EuroStoxx 50 in the euro zone by 1.1% and the Stoxx 600 by 1.3%.

For its part, the MSCI World Index hit a two-week low.

The Netherlands decreed a lockdown on Sunday which should remain in place at least until January 14 to cope with the anticipated upsurge in contamination and uncertainty hangs over what other European countries could decide, including the United Kingdom. United, Italy and Germany.

“There isn’t much to be optimistic about as the end of the year approaches. Concerns over Omicron, not just in Europe but around the world, with all the talk of containment does not constitute not an ideal environment to buy stocks, “observes Michael Hewson, analyst at CMC Markets.

The downtrend is further helped by the unexpected announcement by US Senator Joe Manchin not to support Joe Biden’s bill on social spending.

The announcement, which sparked strong criticism from the White House, prompted Goldman Sachs to downgrade its quarterly growth forecast for the United States in 2022.

VALUES TO FOLLOW AT WALL STREET

In pre-market trading on Wall Street, travel-related values ​​are down sharply: United Airlines, for example, loses 3.4% and Royal Caribbean Cruises 4%.

Moderna is up about 6%. According to the company, tests have shown that a booster dose of its COVID-19 vaccine appeared to offer protection against the Omicron variant.

VALUES IN EUROPE

All European sectors are down, from that of unconstrained consumer goods (-0.53%) to that of transport and leisure (-2.55%).

Unibail, TUI and Lufthansa lose 2.28% to 3.65%.

TechnipFMC, Eni and BP lose around 2.5% due to the drop in crude prices.

Ipsen lost 7.45% after the US FDA gave the green light to the Indian laboratory Cipla for a concurrent treatment of Somatuline, the flagship product of the French group.

Among the biggest drops in the Stoxx 600, Novo Nordisk drops 11.82% as the Danish group said it would not be able to meet demand for its new weight loss drug following problems supply in the United States.

Against the trend, BNP Paribas advanced 0.84% ​​after announcing an agreement with BMO Financial Group for the sale of its commercial banking activities in the United States for 16.3 billion dollars (approximately 14.5 billion euros ).

RATE

The ten-year German Bund yield fell in session to almost two-week low, over -0.4%, as risk aversion resurfaced.

That of ten-year Treasury bills fell 1.5 points to 1.3885%.

CHANGES

The dollar is in equilibrium against other major currencies, now nearing a one-and-a-half-year peak as the US Fed moves towards tightening monetary policy.

The euro is trading around $ 1.127, up 0.28%.

The pound fell 0.28% against the greenback, as the British government refused on Monday to rule out the possibility of restricting gatherings to a few days before Christmas and New Years.

OIL

The oil market is dropping sharply as rising COVID-19 cases in Europe and the United States fuel concerns among investors, who fear further restrictions will affect demand for crude.

The barrel of Brent lost 2.63% to 71.59 dollars and US light crude 3.1% to 68.66 dollars.

(Laetitia Volga, edited by Blandine Hénault)

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