A woman walks past the London Stock Exchange building.
by Claude Chendjou
PARIS (Reuters) – European stocks closed sharply higher on Tuesday and Wall Street was also trading in the green mid-session, with equity markets supported by falling bond yields and the dollar after further deterioration. in manufacturing activity in Europe and the United States. which revives hopes of a pause in the rise in interest rates.
In Paris, the CAC 40 finished with a gain of 4.24% at 6,039.69 points. The British Footsie advanced 2.59% and the German Dax rose 3.78%.
The EuroStoxx 50 index gained 4.2%, the FTSEurofirst 300 3.04% and the Stoxx 600 3.05%.
The slowdown in manufacturing activity in Europe and the United States, which fell in September to the lowest since 2020, supported the reactivation of risk appetite, with investors believing that this new data could lead the main central banks to consider that the rise in the cost of credit is starting to have its effects by curbing demand.
The RBA surprised Australia by becoming one of the first major central banks to raise rates by just 25 basis points on Tuesday after four consecutive big hikes.
“Clearly, today’s RBA decision will fuel speculation that other central banks will start to slow the pace of hikes,” TD Securities analysts wrote in a note.
A sign of a decrease in risk aversion, the dollar and bond yields fell at the close of stock markets in Europe, while the volatility index fell 3.32% to 29.1 points on Wall Street and from 4 .71% to 29.26 points on the pan-European Stoxx. 600.
VALUES IN EUROPE
In Europe, all the main sectors of the rating finished in positive territory, with the tourism and leisure segment (+6.17%) and the new technology segment (+5.07%) posting the biggest gains.
The technology, sensitive to changes in interest rates, benefited from lower yields, upbeat forecasts from Samsung Electronics and Foxconn, as well as the European Parliament’s adoption of a law on a universal charger for electronic devices.
ASM International, Infineon, STMicroelectronics got 6.56%, 7.04% and 4.89%, respectively.
In business matters, M6 fell 10.84% in reaction to the announcement of the abandonment of the sale of the stake of RTL Group, a subsidiary of Bertelsmann, in the French group.
In the rest of Europe, chemical Sika (+6.04%) was boosted by its financial forecasts and the launch of the sale process of part of the activities acquired from a former BASF subsidiary.
ON WALL STREET
At the close of Europe, the Dow Jones advanced 2.49%, the Standard & Poor’s 500 2.75% and the Nasdaq 3.16% in a context of deteriorating labor market in the United States.
The Labor Department’s “JOLTS” (Job Vacancies and Turnover Survey) report, released Tuesday, shows job vacancies fell in August to a nearly two-and-a-half-year low, reinforcing speculation about a slowdown in the Federal Reserve interest rate. hike.
This benefits technology and growth stocks such as Apple, Microsoft, Alphabet and Nvidia, which rose 2.02% to 5.01%, while the semiconductor index jumped 4.29%.
Tesla, which fell 8.6% on Monday after vehicle deliveries missed expectations in the third quarter, rebounded 5.16% on Tuesday.
The ten-year US Treasury bond yield, which hit a two-week low in the session, fell more than three points to 3.619%, after falling more than 20 points on Monday.
That of the German Bund of the same maturity, which fell in session to 1.77%, the lowest since September 19, reduced its closing losses to 1.88%.
François Villeroy de Galhau, a member of the Governing Council of the European Central Bank (ECB), said on Tuesday that the Frankfurt institution would raise its interest rates as much as necessary to curb core inflation, even if the pace of monetary tightening could slow. after the end of the year.
The dollar fell 1.21% against a basket of benchmark currencies as Fed rate expectations for next year fell to 4.39% from 4.75%. The euro took the opportunity to rise to 0.9962 (+1.4%).
Sterling, up 0.91% at $1.1427, continues to benefit from the abandonment of the plan to abolish the UK’s top income tax bracket.
The Australian dollar, down 0.51% against the US dollar, was hit by the lower-than-expected rise in rates from the country’s central bank.
On the eve of the OPEC+ meeting, which could result in a drop in the cartel’s production of more than one million barrels per day (bpd), Brent rose 3.29% to $91.78 a barrel and US light crude (West Texas Intermediate, WTI) 3.28% to 86.37 dollars a barrel.
(Written by Claude Chendjou, edited by Bertrand Boucey)
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