EUROPEAN STOCK EXCHANGES DROP AT THE BEGINNING OF THE SESSION
PARIS (Reuters) – The main European stock markets fell at the start of the session on Tuesday, as investors played it safe against a backdrop of a marked rise in bond yields and oil prices.
In Paris, the CAC 40 lost 1.14% to 7,119.38 points around 08:45 GMT. In London, the FTSE 100 lost 0.69% and in Frankfurt, the Dax dropped 1.02%.
The EuroStoxx 50 index is down 1.15%, the FTSEurofirst 300 1.13% and the Stoxx 600 1.12%, the lowest in eight days.
Futures on major U.S. indices point to a sharp drop on Wall Street following the three-day Martin Luther King Jr Day weekend.
The markets are awaiting on the one hand the continuation of the publications of results in the American banking sector (Goldman Sachs must publish its results before the opening of the markets in New York), on the other hand the decisions that the Federal Reserve will take next week. , with some analysts no longer ruling out a further acceleration in monetary policy tightening.
This renewed uncertainty about the evolution of the Fed’s strategy is influencing the bond markets above all, which is reflected in a sharp rise in yields: that of two-year US Treasury bonds has reached its highest level since February 2020, before the coronavirus crisis, at 1.058%, the ten-year is evolving at more than 1.83% and its German equivalent has once again come close to zero.
At the same time, oil prices are once again posting a sustained rise after the attack attributed to Houthi rebels in the United Arab Emirates, which has raised fears of renewed tension on supply. Brent rose 1.13% to $87.46 a barrel after a nearly seven-year high at $88.13.
Logically, European oil and oil services stocks benefit: their Stoxx index gains 0.48%, the only sectoral increase at the start of the session. In Paris, TotalEnergies takes 0.78%, CGG 1.35%, Technip Energies 1.4%.
Conversely, the high-tech compartment, sensitive to changes in interest rates, dropped 1.97%.
Orange yields 1.03%, which traders explain by the lowering of the recommendation of Goldman Sachs, passed to the sale.
(Written by Marc Angrand, edited by Blandine Hénault)