Paris (awp/afp) – World stock markets remained fragile on Tuesday, before the start of the US Federal Reserve meeting, and while the confinements in China pose a threat to global growth, already affected by the war in Ukraine.
In Europe, the indices made up only part of the losses of the morning, which amounted to 2.5%. Around 1:45 p.m. GMT, Paris lost 0.96%, Frankfurt 0.38% and Milan 0.08% and London 0.44%. In Zurich, the SMI yielded 0.42%.
On Wall Street, the Nasdaq technology index rebounded 0.33%, after falling more than 2% the day before. The Dow Jones and the S&P 500 rose 0.55% and 0.42%.
Undermined by a sharp decline in shares of the technology sector, the Hong Kong Stock Exchange plunged by 5.72% and that of Shanghai by 4.95%.
“The current conflict in Ukraine and the new chaos caused by the Covid in China are enough to agitate the nerves”, summarizes Susannah Streeter, analyst at Hargreaves Lansdown.
Faced with a record number of daily Covid-19 cases in China, authorities locked down several cities and regions, including the tech capital Shenzhen, shutting down many factories like those of Apple’s supplier, electronics maker Foxconn.
Fears of an economic slowdown won the crude oil market: around 1:35 p.m. GMT, the benchmark price of a barrel in the United States, WTI, fell by 7.25% to 95.57 dollars and that of Brent from North Sea for May delivery was down 6.85% to $99.70. Both are back below the 100 dollar mark, which they had crossed in the wake of the Russian invasion.
Russian and Ukrainian delegations resumed talks on Tuesday, as Russian strikes escalated on kyiv itself and the Russian military widened its offensive across the country.
The Kremlin considered premature any “prognosis” on the negotiations with kyiv, after an adviser to the Ukrainian presidency deemed possible a peace agreement by May.
In retaliation, Western sanctions continue. The British government has notably imposed punitive customs duties on vodka and a ban on the export of luxury goods.
Another point of attention for the markets: the monetary policy meeting of the American Federal Reserve (Fed) which begins on Tuesday and whose conclusions will be made on Wednesday after the close of European markets.
The Fed should raise its key rate in order to fight inflation, to the highest since 1982. The key rate had fallen between 0% and 0.25% since March 2020 and the start of the Covid-19 crisis. Analysts expect several hikes over the course of the year.
Luxury touched ___
As China is one of the main markets for luxury companies, the authorities’ containment measures are raising fears of a drop in revenues for the sector.
In Paris, LVMH lost 1.65% and Hermès 1.91%. In Zurich, Richemont dropped 1.63%. In Milan, Tod’s yielded 3.46%, Salvatore Ferragamo 3.07%.
The European Union, for its part, announced on Friday that it would ban exports of luxury goods to Russia.
Intel invests in Europe ___
The American semiconductor giant Intel (+0.27%) unveiled on Tuesday a “historic” investment plan of up to 80 billion euros in the European Union over ten years to produce electronic chips.
After their fall the day before, chipmakers like Nvidia (+1.30%) or AMD (+0.46%) rebounded, without making up for their losses.
In Europe, STMicroelectronics (-0.90%) or Soitec (-2.33%) continued to suffer from fears linked to confinements in China.
On the euro and bitcoin side ___
At around 1:45 p.m. GMT, the euro was trading at $1.0977, up 0.32% from the previous day’s close.
Bitcoin fell 0.31% to $38,600.
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