Stock markets crushed by high rates, Wall Street plunges


New York (awp/afp) – Global stock markets fell sharply on Thursday, as investors expected more interest rate hikes, given inflation, and feared an economic recession.

The European indices ended down sharply by 1.53% in Paris, 1.71% in Frankfurt, 2.40% in Milan and 1.77% in London. Earlier they lost up more than 2%.

In New York, the Dow Jones lost 1.54%, the Nasdaq index dropped 2.84% and the Standard & Poor’s index lost 2.11%.

After Wednesday’s parenthesis, which saw renewed optimism and risk appetite, the S&P 500 plunged back to a new year-end low. The broader index had not finished at this depth since November 2020.

On the bond market, yields rose slightly, close to highs dating back at least ten years. The ten-year German rate, which refers to Europe, was worth 2.18%, against 2.11% the previous evening.

The yield on 10-year US government bonds rose to 3.77%, from 3.73% on Wednesday.

Investors expect central bank inflation-fighting action to continue, with further rate hikes likely to heighten the risk of an economic downturn.

In Germany, consumer price inflation jumped in September to 10.0% year on year, the highest rate since December 1951, due to soaring energy prices, according to provisional figures.

German Chancellor Olaf Scholz announced on Thursday the release of 200 billion euros to precisely cap energy prices.

Anthony Morlet-Lavidalie, economist at BNP Paribas, notes that in Germany, “the rise in producer prices is reaching historic levels” and that “the revaluation of the minimum wage in October will increase the pressure on costs”, and therefore the costs.

In the UK, Prime Minister Liz Truss has embraced the “controversial and difficult” measures taken by her government, despite the concern they are causing among investors.

“We are beginning to see a divergent strabismus between a monetary authority which wants to fight inflation even if it means killing growth and the government which is taking budgetary measures to support the economy and save growth”, underlines Lionel Melka, director of the research at Homa Capital

Around 8:55 p.m. GMT, the pound took 2.05% to 1.1113 dollars, after falling a little earlier to 1.0763 dollars. The euro gained 0.81% to 0.9814 dollars.

Food distribution sees red

The food retail sector fell sharply on Thursday in European markets, after the Belgian group Colruyt warned on Wednesday that its consolidated result would decrease “considerably in 2022/23 compared to 2021/22” under the effects of inflation. . Its stock fell 23.27%.

The titles of Carrefour (-5.56%), Casino (-5.89%), Sainsbury (-5.51%), Tesco (-5.30%) were taken away. To a lesser extent, Walmart yielded 0.31% and Costco fell 1.41% on Wall Street two and a half hours after the opening.

Hard blow for the “tech”

Bank of America analysts lowered their recommendation on Apple stock, which lost 4.91%. They cited slowing demand, which prompted Apple to lower its second-half iPhone sales targets.

Another downside, the hiring freeze at Meta (-3.67% to 136.41 dollars), announced internally Thursday by CEO Mark Zuckerberg.

In general, the technology sector, at the party on Wednesday, was again sanctioned. Alphabet (-2.63%), Nvidia (-4.05%) and Tesla (-6.81%) were particularly badly hit.

Porsche zigzags for its first round of the stock market

The manufacturer of the 911, Porsche AG, ended its first day of trading at 82.48 euros, practically at the level of the introductory price at 82.50 euros and after a backfiring opening at 84 euros.

The Porsche holding company fell by 10.93%, as did the automobile empire under its control, Volkswagen (-6.85%).

Oil drop

Oil prices fell on Thursday, influenced by the firedamp on Wall Street, fueled by anxiety about a coming recession that would contract demand for black gold.

A barrel of Brent North Sea oil for November delivery fell 0.92% to close at $88.49.

The barrel of American West Texas Intermediate (WTI), also due in November, lost 1.11% to 81.23 dollars.

dpa/al



Source link -88