The European stock markets and Wall Street progressed at the end of a week marked by strong amplitudes of variations of the main indices according to the geopolitical tensions and the anticipations of normalization of the monetary policies of the central banks. The Cac 40, which fell to 0.67% this morning after an initial surge, experienced a sudden acceleration to gain up to 4.17% at midday.
Vladimir Putin said that ” some positive developments had been noted in discussions with Ukraine, reports Interfax. According to the news agency, the Russian president told his Belarusian counterpart Alexander Lukashenko that these advances were reported to him by his negotiators, adding that discussions are continuing on a ” almost daily “.
Around 4 p.m., the Bedroom 40 Still gaining 1.35% to 6,290.87 points in a volume of nearly 3.3 billion euros. In New York, the Dow Jones takes 0.72% and the Nasdaq Composite is stable.
The Paris market thus regains part of the ground ceded the day before the announcement of a faster-than-expected reduction in ECB asset purchases. The Parisian index is even on track to sign its first weekly increase in four weeks after a brief passage in the bear market at the start of the week, characterized by a loss of 20% compared to its record of January 5. ” The market is starting to get used to the uncertainties caused by the war in Ukraine, explains Louise Dudley, manager at Federated Hermes. Stakeholders ” take advantage of volatility and negative sentiment to seek out opportunities “, she concludes.
All sectors in the green
The values most exposed to Russia such as Alstom and Societe Generale earn 3% and 1% respectively. All sectors are now in the green, luxury bringing its stone to the building with gains of 1.3% to 2% for LVMH and Kering. On his side, EssilorLuxottica increased by 3.6%. The ophthalmic optics giant says it expects steady growth in sales over the 2022-2026 period, after seeing its business rebound in 2021. Finally, Vallourec takes 4.4%. Societe Generale raised its price target on the manufacturer of seamless tubes from 15 to 17.80 euros, maintaining its recommendation to “buy”.
The failure of the latest talks between the Russian and Ukrainian foreign ministers in Turkey on Thursday is a reminder that hopes for appeasement in the conflict may be quickly dashed as Russian bombardment intensifies in eastern and southern Ukraine. and for Moscow to reorganize its troops around Kiev. The United States and its allies in the European Union and the G7 should for their part withdraw Russia’s status as a privileged trading partner, paving the way for customs duties on many Russian products, reports the Reuters agency in citing sources familiar with the matter. Nothing is official yet, but an announcement to that effect from Joe Biden could come today, according to Bloomberg.
On the bottom, the wariness towards risky assets remains relevant and, according to the statement of Bank of America, the flows have decreased by 13.5 billion dollars on European stocks this week in favor of safe-haven assets such as the gold and cash. A movement generated by geopolitical tensions as well as by the anticipation of more restrictive monetary policies on the part of central banks.
The ECB less accommodating, the Fed ready to act
The ECB adopted a more aggressive tone on Thursday by suggesting the possible end of its asset purchases under its classic APP program in the second quarter, likely a prerequisite for monetary tightening in the second half. In its latest projections, the ECB is now counting on an inflation rate of 5.1% this year, against 3.2% estimated in February. In Germany, the rise in prices was confirmed at 5.5% over one year in February.
In the United States, consumer prices accelerated again in February to reach 7.9% over one year, a new 40-year high. The US Federal Reserve should therefore take the plunge next Wednesday by announcing a 25 basis point hike in the Fed funds rate. Soaring prices could even push the Fed to act ” more aggressive way in an attempt to curb inflation, recalled Jerome Powell before Congress last week.