PARIS (Reuters) – The main European stock markets are on a downward trend on Friday morning, overtaken by the latest macroeconomic data which calls for a prolonged rise in interest rates.

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In Paris, the CAC 40 fell 0.94% to 7,296.61 points around 09:20 GMT. In London, the FTSE 100 lost 0.51% and in Frankfurt, the Dax dropped 1.08%.

The EuroStoxx 50 index fell by 1.1%, the FTSEurofirst 300 by 1% and the Stoxx 600 by 0.87%.

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Futures contracts on the main American indices also foreshadow a further decline on Wall Street with a decline of 0.51% for the Dow Jones, 0.67% for the Standard & Poor’s 500 and 0.88% for the Nasdaq the day after the disappointment caused by the data on producer prices and jobless claims in the United States.

These statistics reflect the resilience of the US economy as the Federal Reserve (Fed) works to curb demand to curb inflation.

In the eurozone, producer prices in Germany also rose more than expected in January year on year, by 17.8%, while in France, the consumer price index was confirmed at 7.0 % over one year. In Britain, UK retail sales posted a surprise rise in January, up 0.5% month on month.

All these data reinforce the prospect of continued monetary tightening by central banks, with the peak in interest rates estimated at more than 5% in the United States and more than 3.5% in the euro zone against 4, respectively. 50%-4.75% and 2.5% currently.

On the financial markets, the new technologies compartment (-1.83%), very sensitive to changes in interest rates, suffered one of the largest drops in the Stoxx 600 on Friday.

Many company publications also animate the exchanges, with in particular Hermès which announced Friday a 22.9% increase in its turnover in the fourth quarter. The luxury group, however, fell by 1.60%, the good news having already been priced in according to analysts at JP Morgan and Credit Suisse.

The results and forecasts of Teleperformance (-2.85%), bottom of the CAC 40, Safran (-0.52%) and Eutelsat (-5.70%) disappointed, while reservations for Air France-KLM (+8.07%) for this year are welcomed, as is Ubisoft’s “net bookings” (+5.05%) over the past quarter.

Elsewhere in Europe, Mercedes-Benz advances by 2.44% after an annual profit above expectations. The German group Uniper, which anticipates a rebound in its profit this year, takes 0.48%. The Swiss chemist Sika gains 2.65%.

On the downside, insurers Allianz and Swiss Re dropped 3.14% and 1.31% respectively after their financial publications.

(Written by Claude Chendjou, edited by Kate Entringer)

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