New York (awp / afp) – Western stock markets ended in the red on Tuesday, investors worried about unexplained leaks on the Nordstream gas pipelines linking Russia to Germany and a new rise in bond rates.
After much of the session up which gave hope for a rebound on the finish line, the indices ended in the red in Paris (-0.27%), Frankfurt (-0.72%) and London (- 0.52%). In Zurich, on the other hand, the SMI gained 0.53%.
“The situation remains tense” on the markets in the grip of volatility and the news around gas has contributed to disadvantage the European indices, observes Andrea Tuéni, analyst at Saxo Bank, interviewed by AFP.
Out of service due to the war in Ukraine, the Nord Stream gas pipelines linking Russia to Germany under the Baltic Sea were both affected by spectacular leaks, preceded by underwater explosions. The President of the European Commission, Ursula von der Leyen, considered on Tuesday evening that the leaks on the Nord Stream gas pipelines in the Baltic Sea were an “act of sabotage”, as had also been mentioned earlier by Denmark and Sweden.
After opening in positive territory, the New York Stock Exchange ended in disarray.
The Dow Jones chained a sixth session of decline in a row and dropped 0.42%, but also recorded a new low for the year at the end, the third in a row. As for the Nasdaq, it gained 0.25%, while the broader S&P 500 index gave up 0.20%.
Since the beginning of the week, volatility has made a resounding return to the markets.
In great stress the day before, the foreign exchange market stabilized on Tuesday, but this was not the case for the sovereign debt market, where bond yields continued to cross peaks. The US borrowing rate with a 10-year maturity is inexorably approaching 4%, the threshold best known for 12 years, which it came close to on Tuesday, at 3.99%.
The spread between German and Italian interest rates, a sign of nervousness in the markets, exceeded 250 basis points for the first time since the spring of 2020, after the victory of post-fascist leader Giorgia Meloni in the Italian legislative elections.
“At the moment, very few investors in the stock market think that things could improve soon,” comments Konstantin Oldenburger, of CMC Markets.
Investors remain focused on macroeconomic developments as major central banks are determined to fight inflation even if growth is to suffer.
Fearing that the global economy is entering a recession, they will be able to measure as early as next month the impact of rising prices and rapid tightening of monetary policies on corporate profits.
In the United States, consumer confidence continued to rise in September, improving even more than expected despite persistent inflation and the risks of a recession in the American economy. Durable goods orders fell slightly in the United States in August, but less sharply than expected.
All relative reflux of the dollar ___
The pound recovered 0.41% to 1.0733 dollars, after plunging to its historic low on Monday. Since Friday, it is still down more than 4%, putting pressure on the Bank of England.
The European currency lost 0.15% to 0.9594 dollars and approached again 0.9554 dollars reached overnight from Sunday to Monday, for the first time in more than 20 years.
Bitcoin fell below the symbolic threshold of 20,000 dollars (at 19,602 dollars).
Gas price jump ___
The price of European natural gas climbed 19.65% to 208 euros per megawatt hour on the reference market, driven by developments concerning Nord Stream.
Oil prices also rebounded on Tuesday. The price of a barrel of Brent from the North Sea for November delivery gained 2.62%, to close at 86.27 dollars.
As for the barrel of American West Texas Intermediate (WTI), also due in November, it took 2.33%, to 78.50 dollars. It had ended Monday at its lowest closing price since the first session of the year, on January 3.
Biffa soars nearly 30% ___
The British waste treatment company Biffa soared 27.8% to 406 pence after the announcement of its acquisition for 1.3 billion pounds (1.5 billion euros) by the fund Energy Capital Partners ( PCE).
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