EUROPEAN STOCK MARKETS END LOWER
by Claude Chendjou
PARIS (Reuters) – European stock markets closed lower again on Tuesday as Wall Street tumbled mid-session amid fears of a recession, monthly PMIs in the euro zone and the United States showed a greater contraction in economic activity.
In Paris, the CAC 40 ended down 0.26% at 6,362.02 points. The British Footsie lost 0.61% and the German Dax lost 0.27%.
The EuroStoxx 50 index fell 0.16%, the FTSEurofirst 300 0.48% and the Stoxx 600 0.42%.
Economic activity in the eurozone contracted for the second consecutive month in August with the composite PMI at 49.2, the weakest reading since February 2021, while in the UK it fell sharply and slowed with a composite PMI at 50. .9 after 52.1 in July.
In the United States, activity slumped this month to its lowest level in 18 months, the composite PMI index stood at 45.0 compared to 47.7 in July, in a context of weakening demand and monetary tightening in a context of record inflation.
New home sales fell 12.6% in July to 511,000 units, the US Commerce Department announced Tuesday.
The statistics turned investors away from risky assets ahead of US Federal Reserve Chairman Jerome Powell’s highly anticipated speech at the annual Jackson Hole symposium on Friday.
VALUES IN EUROPE
In the pan-European Stoxx 600, basic resources (+2.55%) and energy (+3.15%) posted the biggest gains in the sector. Both compartments were supported by supply concerns, with Saudi Arabia citing a potential drop in oil output, while the maintenance shutdown of the Nord Stream 1 pipeline raised fears of a longer suspension against the backdrop of the war in Ukraine. .
Steelmaker ArcelorMittal and oil company TotalEnergies led the CAC 40 with respective gains of 3.02% and 3.24%.
On the negative side, Dassault Systèmes fell 2.4%, following the drop in the technology compartment, which is sensitive to changes in interest rates.
In the rest of Europe, the German group Uniper advanced 4.02% after announcing the restart of the Heyden 4 coal-fired power plant in North Rhine-Westphalia in anticipation of the closure of Nord Stream 1.
Ryanair gained 1.96% in the upward revision to its full-year passenger target.
ON WALL STREET
At the close in Europe, the Dow Jones was down 0.38%, the Standard & Poor’s 500 was almost flat and the Nasdaq was up 0.16% on cheap buying after Monday’s sharp drop in technology shares.
Amazon and Tesla gain 0.33% and 1.61% respectively.
In business news, Macy’s jumped 5.47% as the department store group’s quarterly profit beat expectations, while Zoom Video Communications tumbled 15% after cutting its full-year earnings and revenue guidance by a context of falling demand and intensifying competition.
In the forex market, the euro rose to $0.9974 (+0.33%) after hitting a new 20-plus year low at $0.99005 during the session. The single currency recovered after new home sales statistics in the United States.
The dollar, which had been at its highest level since mid-July against other major currencies, lost 0.62% after this statistic.
The 10-year Treasury yield fell nearly four basis points to 2.9961% after a five-week high of 3.039%.
“The data points to a major contraction, showing that the economy has weakened rapidly, paving the way for the scenario that the Fed is not as aggressive (as expected),” said Edward Moya, an analyst at OANDA.
In Europe, yields also cut their closing gains, with the 10-year German Bund trailing around two basis points to 1.32% while the two-year fell to 0.852% after hitting a new low in the session. maximum since the end of June at 0.941. %
Oil prices are rising, fueled by statements by the Saudi Oil Minister, who recalled that OPEC had the means to raise prices by lowering its production.
Brent rose 3.15% to $99.52 a barrel and West Texas Intermediate (WTI) light crude rose 3.41% to $93.44.
(Written by Claude Chendjou, edited by Bertrand Boucey)
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