EUROPEAN STOCK MARKETS ENDED BEARER ON WEDNESDAY
by Claude Chendjou
PARIS (Reuters) – European stocks closed lower on Wednesday and Wall Street was also trading in the red mid-session as equities were caught up in inflation fears and changing economic conditions, while bonds are rising again before the publication of the minutes of the last meeting of the American Federal Reserve (Fed).
In Paris, the CAC 40 ended down 0.97% at 6,528.32 points. The British Footsie lost 0.28% and the German Dax lost 2.04%.
The EuroStoxx 50 index fell 1.29%, the FTSEurofirst 300 0.85% and the Stoxx 600 0.95%.
After five consecutive sessions of gains in the Stoxx 600, risk aversion dominated the session in Europe while the growth of the gross domestic product (GDP) of the euro area in the second quarter was somewhat less sustained than initially announced (+0 .6% instead of +0.7%), according to the second Eurostat estimate.
UK consumer price inflation also reached 10.1% year-on-year in July, its highest level since February 1982.
In the United States, retail sales showed an unexpected stagnation in July, while economists polled by Reuters had forecast an average increase of 0.1%, official statistics showed on Wednesday.
Investors are now waiting at 18:00 GMT for the “minutes” of the Fed’s July meeting, which could help better assess the risk of a recession and the scope of the expected rate hike by the US central bank in September.
VALUES IN EUROPE
In Europe, most sectors ended in the red with the few gains made by defensive compartments such as beverages and food (+0.47%).
In the CAC 40, Sanofi, one of the heavyweights of the Parisian index, fell 5.68% after the announcement of the cessation of the necessitating development program for the treatment of breast cancer.
In Frankfurt, Uniper fell 12.13%, the German group having published half-year net losses of 12,000 million euros, largely linked to the fall in Russian gas supply.
Upward, Swiss life insurance giant Swiss Life gained 0.27% after a 4% rise in half-year net profit, while Danish brewer Carlsberg advanced 3.85% as the group said the Inflation so far had not had a noticeable impact on the behavior of its customers.
ON WALL STREET
At the time of closing in Europe, the Dow Jones fell 0.91%, the Standard & Poor’s 500 1.14% and the Nasdaq 1.73%, with the indices being affected especially by the results of the distribution sector ( -1.74%) that revive fears about inflation and its effect on consumption.
The US supermarket group Target, which reported a quarterly profit of less than 90% and comparable sales below expectations, lost 3.54%.
Lowe’s, the number two US DIY store, also reported a surprise drop in quarterly comparable sales. However, the stock advanced 0.61%, supported by an annual earnings per share forecast at the top of the range indicated above.
The technology compartment (-1.34%), made up of growth stocks such as Amazon (-2.58%) and Tesla (-1.42%), is in turn affected by the rise in bond yields .
In Europe, bond yields were supported by the prospect of a further 50 basis point hike in September in European Central Bank (ECB) rates following record UK inflation figures.
The ten-year German Bund yield rose more than ten basis points to 1.08%, its highest level since July 22, and the two-year yield, which is even more sensitive to changes in interest rates key interest, rose nearly 15 points to 0.72%. , a peak since July 21.
Two-year and ten-year US Treasuries rose 8.6 points to 3.337% and 7.6 points to 2.898%, respectively, as traders equally priced in the likelihood of a rate hike from the Fed 50 points or 75 points.
The dollar was up 0.27% against other major currencies before the Fed “minutes”, having already gained 2% since last week.
The euro, with a fall of 0.04%, is trading at 1.0162 dollars.
New Zealand’s dollar gained as much as 0.6% after the country’s central bank raised its benchmark rate by 50 basis points to 3.00%, while hinting further hikes could follow.
The British pound is also appreciating after the UK inflation figures.
Oil prices are recovering slightly after falling to six-month lows on Tuesday, as the American Petroleum Institute’s (API) announcement of lower crude and fuel inventories last week in the United States offered them some support.
Brent rose 0.22% to $92.54 a barrel and US light crude (West Texas Intermediate, WTI) rose 0.38% to $86.86 a barrel.
(Some data may show a slight change)
(Written by Claude Chendjou, edited by Jean-Michel Bélot)
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