PARIS (Reuters) – European stock markets regained ground on Friday in early trading pending the publication of US employment figures, which could give more indications on the future path of the Federal Reserve’s monetary policy.

In Paris, the CAC 40 gained 0.45% to 7,373.81 points at 07:57 GMT. In London, the FTSE 100 takes 0.61% and in Frankfurt, the Dax advances by 0.4%.

The EuroStoxx 50 index is up 0.22%, the FTSEurofirst 300 0.28% and the Stoxx 600 0.23%.

Wall Street ended in the red as the Californian bank PacWest Bancorp (-51%) said it was considering a sale among several strategic options, causing its share price to fall by 51% and the financial sector by 1.29%.

Ongoing difficulties in the banking world have led some observers to believe that the Federal Reserve will soon have to end its cycle of raising interest rates, as it hinted at the end of its meeting on Wednesday.

“The US banking turmoil increases the risk of a hard landing for the economy… We believe further Fed hikes are not on the cards,” said Emmanuel Cau, at Barclays, adding that only “a rapid drop in inflation” or “a sharp weakening in growth” would induce the central bank to lower rates.

The results of the giant Apple, higher than expected, also contribute to improving the market climate. In after-hours trading, the Cupertino group was up 2% and Nasdaq 100 futures are up 0.4%.

Caution could however limit risk-taking pending the employment statistics in the United States in April, which are due to be published at 12:30 GMT.

In European company news, Air France-KLM dropped 3.81%, with analysts pointing to an operating loss slightly above expectations.

British competitor IAG gained 2.72%, the owner of British Airways predicting a profit above its expectations this year thanks to a significant rebound in demand.

Adidas climbed 5.06%, among the strongest gains in the Stoxx 600, after the publication of better than expected quarterly results.

(Laetitia Volga, editing by Kate Entringer)

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