Market: Start of the week in the red for equities


PARIS (Reuters) – Wall Street is expected to fall at the opening and European stocks are down on Monday at mid-session, new signs of deterioration in the economic situation in China heightening concerns about global growth.

Futures contracts signal a decline of 0.04% for the Dow Jones, 0.36% for the Standard & Poor’s-500 and 0.51% for the Nasdaq.

In Paris, the CAC 40 lost 0.41% to 6,336.46 points around 11:30 GMT. In Frankfurt, the Dax dropped 0.69% and in London, the FTSE was virtually unchanged.

The pan-European FTSEurofirst 300 index fell 0.1%, the Eurozone EuroStoxx 50 fell 0.68% and the Stoxx 600 fell 0.28%.

The MSCI world index, which includes around 50 markets, is almost stable after falling to its lowest level in 18 months on Thursday in a climate of general mistrust, investors fearing that monetary tightening by central banks to counter inflation harms the global economy.

These concerns were accentuated after the announcement on Monday in China of a deeper than expected fall in retail sales and an unexpected drop in industrial production in April compared to the same month last year due to the restrictive measures taken against COVID-19.

Chinese stock markets ended down even though their decline was limited by the announcement of a plan aimed at complete deconfinement and a return to normal life in Shanghai from June 1.

The European Commission has further lowered its growth forecast for the euro zone, to 2.7% for 2022 from 4% previously, and it has raised its inflation forecast taking into account the expected economic impact of the invasion of Ukraine by Russia.

VALUES IN EUROPE

On the stock market, the Stoxx basic resources index posted the strongest sectoral increase (+1.17%) thanks to the increase in the prices of industrial metals, favored by the prospect of an easing of health restrictions in China.

ArcelorMittal, Glencore and Antofagasta advance from 1.59% to 3.29%.

Casino gains 5.15% after confirming that it has launched the process of selling its renewable energy subsidiary GreenYellow with a view to a potential operation by the end of the year.

Valneva falls 19.82% after Brussels informs the laboratory of its intention to terminate its contract for the supply of vaccines against COVID-19.

In London, Vodafone took 1.63% after the United Arab Emirates telecommunications company e& revealed that it had taken a 9.8% stake in the British operator for 4.4 billion dollars.

RATES/EXCHANGES

Eurozone government bond yields are up sharply after Francois Villeroy de Galhau, a member of the European Central Bank’s Governing Council, said the current weakness of the euro could complicate the ECB’s efforts to achieve its objective of controlling inflation.

The ten-year Bund yield gained 3.5 basis points to 0.986% and its French equivalent took four points to 1.505%.

The euro, which has posted negative monthly performance since the start of the year and fell last Friday to its lowest level since 2017, at $1.0348, rose to 1.0424, up 0.12%.

In the United States, the yield on ten-year Treasuries fell slightly to 2.9112%, while the dollar lost 0.15% against a basket of international currencies.

OIL

Oil prices are falling, with poor Chinese indicators fueling fears of a global recession.

However, the market is limiting its losses thanks to the prospect of a European embargo on imports of Russian crude.

Brent fell 1.16% to 110.26 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.06% to 109.32 dollars.

(Written by Laetitia Volga, edited by Marc Angrand)

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