Stocks on the defensive after the Fed

PARIS, Jan 27 (Reuters) – Apart from London, the main European stock markets are moving down at the start of the session on Thursday the day after the Federal Reserve’s announcements which are fueling concerns about the pace of monetary tightening to come in the United States. In Paris, the CAC 40 lost 0.69% to 6,934.07 points around 09:10 GMT. In London, the FTSE 100 climbed 0.07% and in Frankfurt, the Dax fell 1%. The EuroStoxx 50 index is down 0.98%, the FTSEurofirst 300 0.51% and the Stoxx 600 0.6%. On Wednesday evening, the Fed announced after its two-day monetary policy committee meeting that it would likely raise interest rates in March and reaffirmed its intention to end its bond purchases in March as well. on the markets, before starting to reduce its balance sheet in a “significant” way. BNP Paribas forecasts up to six 25 basis point hikes this year, compared to four previously, and expects the target range for the fed funds rate to be between 2.25% and 2.50% at the end of 2023, i.e. 25 basis points more than in the previous estimate. “Our new base scenario of six rate hikes poses a challenge to our positive outlook for US equities,” the French bank’s strategists said in a note. The prospect of an upcoming Fed rate hike favors banking stocks, including the Stoxx index gaining 1.39%. Deutsche Bank’s 4.13% gain, which posted its best annual profit in ten years, further supported the sector. In Paris, Crédit Agricole, BNP Paribas and Société Générale take from 0.92% to 1.71% while in London, HSBC climbs by 3%. The technological compartment (-2.34%) shows him the biggest drop of the morning. SAP drops 7.01% after announcing the takeover of an American fintech and confirming its Q4 results. But STMicroelectronics gains 3.77% after announcing quarterly earnings above expectations and its intention to double its investments this year. Among the other results of the day, Valeo takes 3.09% and Soitec 1.69%. Elior fell 12.13% after suspending its financial targets for the current financial year, citing a lack of visibility on the impact of restrictions to stem the epidemic wave. (Laetitia Volga, edited by Blandine Hénault)