PARIS (Reuters) – The main European stock markets are moving in small variations on Thursday morning the day after announcements deemed to be contrasting by the American Federal Reserve (Fed) while the monetary policy press releases from the Bank of England (BoE) and the Swiss National Bank (SNB) are notably expected during the day.

In Paris, the CAC 40 lost 0.05% to 7,127.50 points around 08:45 GMT. In London, the FTSE 100 fell by 0.58% and in Frankfurt, the Dax fell by 0.03%.

The EuroStoxx 50 index dropped 0.17%, the FTSEurofirst 300 0.54% and the Stoxx 600 0.31%.

Futures contracts on Wall Street predict a rise of 0.5% for the Dow Jones, 0.74% for the Standard & Poor’s 500 and 1.09% for the Nasdaq the day after a sawtooth session which ended in a sharp decline.

The Fed on Wednesday announced a quarter-point hike in its main key interest rate but hinted that it was about to halt its monetary tightening cycle in the face of recent tensions in financial markets. Its chairman, Jerome Powell, however, said he was not ruling out further rate hikes if necessary, leaving investors perplexed. Especially since at the same time, Janet Yellen, the American Secretary of the Treasury, assured, during a hearing before the Senate, that she was not considering a “comprehensive guarantee” for all bank deposits in the United States, at the risk of rekindle the crisis in the sector.

Concerning the BoE, a rate hike of 25 basis points is expected by the markets, but the reacceleration of inflation in Great Britain to 10.4% year on year in February puts the central bank under pressure as the cycle monetary tightening is also supposed to have come to an end.

The markets are divided on the raising of the SNB rates by 50 basis points or 25 points after the emergency rescue of Credit Suisse, acquired by UBS. A rate hike by the Bank of Norway is also expected.

On the stock market, the technology compartment (+0.85%) and that of basic resources (+0.37%) are leading the Stoxx, taking advantage of a possible lull in Fed rates and the decline in bond yields . The two-year German lost almost ten basis points, to 2.6%, in the wake of its American equivalent.

The index of banking stocks in Europe yielded 0.49%, as Citigroup lowered its rating on the sector, believing that the rapid pace of interest rate hikes will weigh more on economic activity and bank profits. The intermediate sees the index remaining close to its current levels through the end of the year.

In individual values, Sanofi jumped 4.77% after promising results from its Dupixent against “smoker’s bronchitis”. The Nantes laboratory Valneva, on the other hand, fell by 6.33% after a forecast of turnover for this year down from the 361.3 million euros generated in 2022.

Italian group INWIT took 4.33% as sources told Reuters that French investment firm Ardian was considering an offer for the telecommunications tower specialist to delist it.

(Written by Claude Chendjou, edited by Blandine Hénault)

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