by Laetitia Volga
PARIS (Reuters) – European stock markets ended in scattered order on Thursday, between the sharper-than-expected rise in jobless claims in the United States and uncertainties about the extent of the rise in American interest rates.
In Paris, the CAC 40 fell 0.12% to 7,315.88 points. The British Footsie lost 0.63%, penalized by the decline in mining stocks, and the German Dax eroded 0.01%.
The EuroStoxx 50 index ended stable and fell 0.05%, the FTSEurofirst 300 fell 0.12% and the Stoxx 600 0.22%.
At the time of the close in Europe, Wall Street reduced the gains recorded at the start of the session: the Dow Jones and Standard & Poor’s 500 indices were granted less than 0.1% and the Nasdaq Composite 0.3%.
The revival of risk appetite was for a time supported by the announcement of an increase in initial claims for unemployment benefits in the United States to 211,000 last week, their highest level in two months.
“The market is watching for any signs of a weaker job market because the Fed believes inflation is being fueled by rising wages,” said Jay Hatfield, portfolio manager at InfraCap. “Anything that shows a deceleration in employment is positive for bond and equity markets.”
But investors remain very cautious. While this statistic is a positive move for financial markets, several indicators have recently suggested that the labor market remains tight, which, along with Federal Reserve Chairman Jerome Powell’s “hawkish” remarks to Congress this week, have exacerbated fears that the institution is accelerating the pace of its monetary tightening.
These concerns could be reinforced or mitigated with Friday’s long-awaited release of the US jobs report, which includes the number of job creations in February.
VALUES
On the equity side, investors turned away from sectors generally sought after for their yield, such as real estate (-3.24%). Values in the basic resources compartment (-2.72%) were also left out.
In Paris, Unibail-Rodamco-Westfield finished bottom of the CAC with a decline of 3.83%.
Aircraft manufacturer Dassault Aviation soared 12.21% to a closing record after posting better-than-expected annual results.
JCDecaux fell by 16.90%, the group predicting a slowdown in its organic growth in 2023 turnover and no dividend payment.
Credit Suisse lost 1.94%, the bank having postponed the publication of its annual report after points raised by the authority of the markets in the United States on its 2019 and 2020 accounts.
CHANGES
The dollar is losing ground as the stronger-than-expected rise in jobless claims raises hopes that the Fed won’t step up the pace of its rate hikes.
The index, which measures its fluctuations against a benchmark basket, fell 0.41% and the euro rose to 1.0576, up 0.3%.
RATE
Yields on US government bonds have started falling again: the ten-year one was at 3.9717% at the European close and the two-year one was down nine basis points, below 5%.
In the European market, the ten-year German Bund yield ended the day stable at 2.637%.
OIL
After two sessions in the red, oil prices are rising, supported by the depreciation of the dollar, the disruption of fuel supplies in France and the drop in inventories of American crude.
Brent gained 0.48% to 83.06 dollars a barrel and American light crude (West Texas Intermediate, WTI) 0.55% to 77.08 dollars.
(Laetitia Volga, edited by Blandine Hénault)
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