SCHOLARSHIPS IN EUROPE END IN THE GREEN
by Juliette Portala
(Reuters) – European stock markets ended in the green on Tuesday thanks to the easing of health restrictions in China, but their progress was started in the second part of the session by the fall in Wall Street and a disappointing American indicator.
In Paris, the CAC 40 climbed 0.64% to 6,086.02 points. Britain’s Footsie gained 0.9% and Germany’s Dax gained 0.35%.
The EuroStoxx 50 index advanced by 0.29% and the FTSEurofirst 300 by 0.25%. The Stoxx 600 gained 0.27% from 0.99% at the daily high.
After a positive start to the session, Wall Street turned lower following the sharper-than-expected deterioration in US consumer confidence, with the Conference Board index falling to 98.7 in June, its most low level since February 2021, due to high inflation and concerns about economic growth.
At the close of European stock markets, the Dow Jones index lost 0.27%, the Standard & Poor’s 500 0.62% and the Nasdaq Composite 1.3%.
As a result, European equity markets reduced their gains but encouraging news on the evolution of the COVID-19 epidemic in China still prevailed.
China will halve the duration of the quarantine imposed on travelers arriving from abroad and the metropolises of Beijing and Shanghai recorded no local cases of SARS-CoV-2 transmission on Monday, two pieces of information that give some hope to investors on the economic outlook.
VALUES
The European materials and energy sectors ended up 1.17% and 2% respectively, on hopes of a recovery in demand in China and rising crude prices.
The renewed optimism about China also benefited luxury and aerospace stocks: LVMH and Kering gained 1.53% and 1.40% respectively, Safran finished at the top of the CAC 40 with a gain of 3 .88%.
Aramis Group, which announced the takeover of the Austrian specialist in the sale of used vehicles Onlinecars, won 2.29% at the European close.
Red lantern of the Amsterdam AEX index, AkzoNobel fell 2.02% after the appointment of a new chief executive, a timing which, according to Jefferies, could jeopardize the achievement of the group’s profitability objective and consequently increase the risk of another change in management.
CHANGES
The dollar index, which measures the variations of the greenback against a basket of international currencies, gained 0.47% and the euro fell 0.46% to 1.0534 with the absence of new light from the European Central Bank on the institution’s outlook.
Christine Lagarde, its chair, said the institution’s future bond-purchasing program would reduce borrowing costs for the most vulnerable states in the eurozone but would keep pressure on governments to to clean up public finances.
“The ECB is in a difficult situation because it is expected to experience a slowdown (of the economy of the euro zone – Editor’s note) more important than many other central banks”, commented Mazen Issa, senior strategist at TD Securities in New York. . “There’s an inherent limit to what she’s going to be able to do.”
RATE
Eurozone benchmark yields have risen sharply as bond market investors remain focused on inflation risks. The ten-year German took almost ten basis points at the end of the session around 1.635% and its French equivalent ended at 2.18%.
In the United States, the yields of Treasuries are also on the rise: the ten-year gains two basis points to 3.1923%.
OIL
Oil prices continue to rise on doubts over the ability of Saudi Arabia and the United Arab Emirates to significantly increase production and as G7 leaders consider a possible price cap on oil and gas imports Russians.
Brent gained 1.66% to 117 dollars a barrel and American light crude (West Texas Intermediate, WTI) gained 1.02% to 110.69 dollars.
THE INDICATORS OF THE DAY
Among the other indicators of the day, the consumer confidence index in France also fell more than expected in June, reaching a low for almost nine years, at 82 points.
TO BE FOLLOWED WEDNESDAY
US Federal Reserve Chairman Jerome Powell will participate in a panel discussion at the annual Central Banks Forum hosted by the ECB in Sintra, Portugal.
(Report Juliette Portala, edited by Laetitia Volga and Bertrand Boucey)
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