by Laetitia Volga
PARIS (Reuters) – Stock markets in the euro zone ended lower on Thursday and Wall Street fell mid-session, the decline in the automotive sector in the wake of Tesla weighing on the morale of investors, already shaken by uncertainties over monetary policy.
In Paris, the CAC 40 lost 0.14% to 7,538.71 points. The British Footsie nibbling 0.05% and the German Dax 0.62%.
The EuroStoxx 50 index fell 0.2%, the FTSEurofirst 300 0.1% and the Stoxx 600 0.15%.
At the time of the close in Europe, the main indices on Wall Street were down 0.3% to 0.6%.
Tesla fell 9.45% after a quarterly gross margin below expectations due to repeated price cuts on its electric vehicles.
The automaker intends to continue this price war that began at the end of 2022, which is driving the stock prices of its competitors into the red.
Persistent concerns about central bank rate policy also continued to weigh on the trend in Europe and the United States. Disappointing UK inflation figures released on Wednesday raised fears that major institutions will continue to prioritize price stability over support for the economy.
Confirming this apprehension, the President of the ECB, Christine Lagarde, estimated that there was “still a little way to go” on the tightening of the policy in the face of inflation “too strong compared to the target”.
VALUES
The European auto sector fell 3.73%, posting the biggest drop of the day, on fears that Elon Musk’s firm, Tesla, will continue to cut the prices of its electric cars.
“The fact that demand for electric cars is falling doesn’t help either, given that the economic incentive to own one has fallen alongside falling gas prices,” said Michael Hewson, at CMC Markets. .
Thus, despite strong growth in its turnover in the first quarter, Renault fell by 7.97%, its largest drop in more than a year. Volkswagen, Mercedes, BMW and Stellantis lost 3.09% to 5.31%.
L’Oréal (+1.72%) finished at the top of the CAC after sales growth boosted by its activity in the United States and Europe.
RATES Yields on European government bonds ended down after hitting their highest level in a month the day before with the prospect of continued monetary tightening by the major central banks.
The ten-year German benchmark in the euro zone fell below 2.45% after rising to 2.54% on Wednesday.
On the American market, the yield of ten-year Treasuries lost more than ten points to 3.5337%.
Investor concerns over the raising of the US debt ceiling – a subject on which Democrats and Republicans cannot agree – have driven up the cost of a guarantee against the risk of default by the United States at its highest level since 2011.
CHANGES
The dollar gave up a little ground against a basket of currencies (-0.2%), the weakness of the day’s indicators confirming expectations of a recession in the United States this year.
Jobless claims rose slightly last week as the Philly Fed business index, which covers the Philadelphia area, plunged to its lowest level in nearly three years. The variations are limited on the foreign exchange side: the dollar lost 0.11% against other major currencies, including the euro at 1.0972 dollars.
OIL
The oil market fell to its lowest level since the beginning of the month, depressed by a stronger dollar and expectations of higher interest rates.
Brent fell 2.23% to 81.27 dollars a barrel and US light crude (West Texas Intermediate, WTI) 2.17% to 77.44 dollars.
(Laetitia Volga, edited by Tangi Salaün)
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