EUROPEAN STOCK EXCHANGES SHOCKING MID-SESSION
by Laetitia Volga
PARIS (Reuters) – Wall Street is expected to fall and European stock markets are hesitant mid-session on Monday after a series of Chinese economic indicators fell short of expectations.
Futures contracts indicate a drop of 0.5% for the Dow Jones, 0.44% for the Standard & Poor’s-500 and 0.24% for the Nasdaq.
In Paris, the CAC 40 gained 0.2% to 6,567.14 around 10:55 GMT. In Frankfurt, the Dax gained 0.08% and in London, the FTSE lost 0.1%.
The pan-European FTSEurofirst 300 index rose 0.21%, the Eurozone EuroStoxx 50 0.18% and the Stoxx 600 0.25%.
China’s July industrial production and retail sales figures released on Monday were below market expectations, illustrating the impact of COVID-19 outbreak restrictions on the world’s second-largest economy.
In an effort to support growth, the People’s Bank of China unexpectedly lowered its key policy rates.
“Initially, it’s seen as a stimulus to the economy, but if you cut rates, it can also be seen as an admission that your economy needs help,” said David Madden of Equiti Capital.
ING lowered its growth estimate for China’s economy to 4% from 4.4% previously, warning that a further downgrade of its forecast was possible depending on the impact of inflation on exports, health restrictions and rising unemployment. in mainland China.
For investors, one of the main economic events of the week will be the release of US retail sales on Wednesday and the minutes of the latest meeting of the Federal Reserve.
VALUES IN EUROPE
On concerns about the growth of the Chinese economy, the automotive and raw materials sectors, highly exposed to China, fell by 0.56% and 1.33% respectively.
Oil stocks are suffering from the fall in crude oil prices for the second consecutive session: TotalEnergies falls 1.64% and Shell 2.08%. The sector as a whole lost 1.4%.
Higher, HelloFresh rises 5.33% after confirming its medium-term targets and saying it is “cautiously optimistic” for the second half despite inflation and a slowing economy and Henkel rises 0.93% after having raised its annual revenue growth target.
The pharmaceutical group AstraZeneca gains 2.78% after announcing that a trial has confirmed the benefit of the drug Enhertu, developed with the Japanese Daiichi Sankyo, in patients with an advanced form of breast cancer and previously treated with another treatment.
Oil prices fell sharply, penalized by a possible increase in production by Saudi Aramco, as mentioned by the CEO of the oil giant, and by concerns about signs of a slowdown in the Chinese economy.
The market is also expecting Iran’s response to the European Union’s proposal to relaunch talks to salvage the 2015 nuclear deal by midnight, which could boost global supply.
Brent lost 4.66% to $93.58 a barrel and US light crude (West Texas Intermediate, WTI) lost 4.82% to $87.65.
In the foreign exchange market, economic indicators below expectations fuel recession fears, which benefits the dollar, which rises 0.6% against a basket of reference currencies and
The euro fell to $1.0201, close to a one-week low hit earlier at $1.0185.
Concerns related to China, but also gas supplies to Germany, favor government bonds in Europe. The 10-year Bund yield lost almost four basis points to 0.955%.
In the United States, the ten-year fell two points to 2.8276%.
(Written by Laetitia Volga, edited by Kate Enterringer)
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