by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to see slight variations at the opening on Tuesday and European stock markets are also moving on a cautious note at mid-session, the euphoria of the first exchanges losing its breath with the banking sector in particular.
New York index futures signal an opening on Wall Street down 0.01% for the Dow Jones, 0.04% for the Standard & Poor’s 500 and 0.1% for the Nasdaq.
In Paris, the CAC 40 takes 0.22% to 7,093.96 points around 12:20 GMT. In Frankfurt, the Dax advanced by 0.19% and in London, the FTSE gained 0.02%.
The pan-European FTSEurofirst 300 index fell by 0.03%, the EuroStoxx 50 of the euro zone gained 0.19% and the Stoxx 600 nibbled away at 0.03%.
European markets, which opened sharply higher after the announcement of US regulators’ support for First Citizens Bank’s proposed takeover of Silicon Valley Bank (SVB) deposits and loans, were without clear direction at midday, alternating one foot in the red and another in the green in a context of persistent volatility.
The VIX index in the United States rose to 20.82 points (+1.06%) and its European equivalent rose by 0.49% to 23.17 points.
The European banking compartment, which gained up to 2% in morning trading, reduced its gains to 0.5%.
The National Financial Prosecutor’s Office (PNF) in France also declared on Tuesday that searches were underway at the premises of several banks, including Société Générale (-0.73%), BNP Paribas (-0.19%) and HSBC ( +0.27%), as part of an investigation for tax evasion and laundering of tax evasion.
“Market sentiment is likely to remain cautious over the coming days,” said Michael Hewson, market analyst at CMC Markets.
In the United States, First Citizens BancShares shares, which jumped more than 50% on Monday, are stable before the opening of Wall Street, while the major American banks JP Morgan Chase & Co, Bank of America and Citigroup are indicated on the rise but in small variations, ranging from 0.5% to 0.7%.
Two US officials, Michael Barr and Martin Gruenberg, Vice Chairman of the Fed and Chairman of the FDIC respectively, are scheduled to speak to Congress from 2:00 p.m. GMT. According to the statements prepared for this hearing, they should reaffirm that the financial system in the United States is solid but that the rules must be reviewed.
WALL STREET VALUES TO FOLLOW
VALUES IN EUROPE
Among the major sectors of the European rating, compartments sensitive to interest rates such as new technologies (-0.95%) and real estate (-3.13%) are among the largest declines against a backdrop of continued recovery bond yields with the ebb of fears about the banks.
The real estate index hit a five-and-a-half-month low on Tuesday, with Citigroup estimating the day before that the shares of companies in the sector could fall by 20% to 40% between 2023 and 2024, or even more than 50% if the market tests the price/earnings ratio.
Stocks related to energy (+1.34%) and basic resources (+0.88%) are however sought after in the context of an increase in the forecast for oil imports from China this year.
In distribution (-0.37%), Ocado Group fell 4.99% after the results of its online supermarket chain Ocado Retail while data published by the firm Kantar show that the rise in food prices in stores in Britain reached a record rate of 17.5% in the four weeks to March 19.
RATES The alleviation of concerns in the banking sector favors the rise in bond yields, the German tenth gaining more than eight basis points to 2.31%. However, it remains far from its peak of July 2011 hit in early March at 2.77%.
In the United States, the yield on Treasuries with the same maturity rose by nearly three points, to 3.55%.
The ebb in risk aversion weighed on the dollar, which lost ground for the second consecutive session, falling 0.26% against a basket of benchmark currencies.
The euro took advantage of this to rise to 1.0827 dollars (+0.29%).
Oil prices are up slightly as investors try to digest news on banks, supply risks from disruptions in crude exports from Iraqi Kurdistan and signs of rising demand in China.
Brent rose 0.18% to 78.26 dollars a barrel and US light crude (West Texas Intermediate, WTI) gained 0.12% to 72.90 dollars.
(Written by Claude Chendjou, edited by Blandine Hénault)
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