Stock market: Europe falls further with fears over rates

PARIS (Reuters) – The main European stock markets are trending downward on Friday for the last day of a week marked by monetary policy decisions by major central banks which have fueled fears of high interest rates over a long period.

In Paris, the CAC 40 lost 0.67% to 7,165.50 points around 07:25 GMT. In London, the FTSE 100 fell by 0.25% and in Frankfurt, the Dax fell by 0.27%.

The EuroStoxx 50 index fell by 0.34%, the FTSEurofirst 300 by 0.62% and the Stoxx 600 by 0.22%.

Over the week as a whole, the CAC 40 lost 3.04% at this stage and the Stoxx 600 1.95%.

Futures contracts on Wall Street predict a slight rebound of 0.13% for the Dow Jones, 0.17% for the Standard & Poor’s 500 and 0.36% for the Nasdaq the day after a session in the red .

The American Federal Reserve (Fed) stunned the markets on Wednesday evening by combining the status quo decided on its interest rates with a warning on their evolution and a revision of its inflation and growth forecasts, paving the way to a restrictive policy longer than expected.

The day after these announcements, three other central banks, including the Bank of England (BoE), also suggested that the fight against inflation was far from over, not ruling out further rate hikes.

At the same time, several intermediaries, such as UBS and Goldman Sachs, have pushed back the timetable for a possible rate cut by the Fed and the European Central Bank (ECB).

Concerns about rates could be joined by concerns about the evolution of the economy in Europe with the publication of the PMI indices. The first figures show that in France, the services PMI fell to its lowest level in 34 months, to 43.9 points in September, compared to 46.0 in August.

On the stock market, the rise in bond yields still weighs on new technologies (-1.52%) in Europe.

Energy (+0.11%) is supported by fears of a supply deficit, with Russia having temporarily banned, with immediate effect, fuel exports to most countries. Oil should, however, record a loss over the week as a whole after having gained more than 10% over the last three weeks.

In corporate news, Sanofi fell by

Atos sells 1.53% amid a dispute with certain shareholders concerning the planned sale of Tech Foundations, while Ubisoft benefits (+3.76%) from a possible British green light for the proposed takeover of Activision by Microsoft.

Elsewhere in Europe, Adevinta soars by more than 11% following an acquisition offer from a consortium led by Permira and Blackstone.

(Written by Claude Chendjou, edited by Blandine Hénault)

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