The downturn continues in Europe, concern over interest rates prevails

PARIS, September 14 (Reuters) – The main European stock markets fell at the start of the session on Wednesday, amplifying the decline started the day before after the figures considered disappointing for inflation in the United States, which could lead the Federal Reserve to extend the tightening to forced march of its monetary policy. In Paris, the CAC 40 lost 0.44% to 6,218.22 points around 07:40 GMT. In London, the FTSE 100 lost 0.96% and in Frankfurt, the Dax fell 0.36%. The EuroStoxx 50 index is down 0.34%, the FTSEurofirst 300 0.65% and the Stoxx 600 0.38%. All of them have already fallen sharply on Tuesday after the announcement of an unexpected increase in consumer prices in the United States in August. And Wall Street fell even more heavily to post its worst performance since June 2020, with the Standard & Poor’s 500 index yielding 4.32% and the Nasdaq Composite 5.16%. Investors no longer rule out that the Fed will raise its rates by 100 basis points next week, even if the hypothesis of a rise of 75 points, which would be the third in a row, remains favoured. And beyond that, the persistence of inflationary pressures could prevent the American central bank from altering its strategy next year in the event of a deterioration in the economic situation. These risks translate into a further surge in yields on US Treasury bonds (the two-year rate exceeded 3.8%, the highest since 2007) and an accentuation of the inversion of yield curves, the gap between the two- and ten-year yields exceeding 33 basis points. In Europe, the German two-year yield hit 1.432%, the highest in 11 years. This context continues to disadvantage technology stocks, which are sensitive to changes in interest rates and whose European Stoxx sector index dropped 0.18%. But the most marked decline is for the compartment of services to communities (“utilities”), which yields 1.11% . On the rise, the distribution sector (+1.82%) benefited from the 4.56% increase in Inditex after its half-year results. (Written by Marc Angrand)