by Claude Chendjou

PARIS (Reuters) – European stock markets ended lower on Wednesday and Wall Street was also in the red as concerns over a possible US default grew.

In Paris, the CAC 40 ended in 1.70% at 7,253.46 points, the third consecutive session in the red. The British Footsie for its part dropped 1.75% and the German Dax 1.92%.

The EuroStoxx 50 index, the FTSEurofirst 300 and the Stoxx 600 each fell 1.81%.

At the close in Europe, the Dow Jones fell 0.78%, the Standard & Poor’s 500 0.84% ​​and the Nasdaq 0.89%, with all three indexes heading for a second consecutive session of declines .

All the main sectors of the S&P-500 are in the red, the most marked declines being for compartments sensitive to the economic situation such as finance (-1.33%) or industry (-1.06%).

Negotiations on US debt are also weighing on the indices.

Jamie Cox, associate director at Harris Financial Group, said as we get closer to the June 1 deadline, markets will become much more nervous if the deadlock between Republicans and Democrats over raising the debt ceiling breaks down. continues.

Investors are also awaiting the publication at 6:00 p.m. GMT of the “minutes” of the May 2 and 3 meeting of the US Federal Reserve (Fed) in the hope of obtaining indications on the trajectory of interest rates.

Fed officials Neel Kashkari and Patrick Harker recently said the US central bank could backtrack on the medium-term inflation target of 2% as price increases slow slightly.

Meanwhile, the CBOE index measuring volatility in the United States rose 9.76% to 20.34 points, while its European equivalent ended on a jump of 18.46% to 20.93 points.

VALUES IN EUROPE

Virtually every major market segment in Europe ended in the red, with real estate (-2.99%) posting the biggest decline, alongside cyclical sectors such as autos (-2.42%) and banks (-2.53%).

Deutsche Bank, HSBC fell 2.29% and 2.84% respectively as the CMA, the UK competition and markets authority suspects these two banks and three others in North America of collusion on the bond market.

The luxury segment, which fell heavily on profit-taking on Tuesday, lost another 1.74%, falling to a seven-week low. LVMH (-2.0499%), Kering (-2.3579%), Richemont -2.93 or Burberry (-1.594%) finished in the red.

In terms of corporate results, Marks & Spencer jumped 12.93% as the British retailer returned to the dividend and signaled that its recovery was beginning to bear fruit. Insurer Aviva, on the other hand, fell 5.87% after the publication of its quarterly accounts, while Kingfisher lost 2.55% after the announcement of a drop in sales in the three months to the end of April.

Swedish gaming group Embracer plunged 44.82% after it announced a failed strategic partnership and lowered its full-year adjusted profit forecast.

AT WALL STREET

Kohl’s, up 6.23%, and Abercrombie & Fitch, up 26.33%, stand out in a bear market after their financial releases. The distribution compartment gleans 0.13%.

Nvidia drops 2.20% ahead of the release of its expected results after the Wall Street close, while Agilent Technologies plunges 7.87% after lowering its annual guidance.

THE INDICATORS OF THE DAY

UK consumer price inflation slowed less than expected in April (+8.7%) and core inflation (+6.8%) accelerated to its highest level in 31 years.

The morale of German business leaders, measured by the Ifo index, deteriorated in May, to 91.7 after 93.4 in April.

CHANGES

The dollar, a safe haven asset, appreciated by 0.32% to climb to a two-month peak against a basket of benchmark currencies.

The euro fell 0.1% to 1.0757 dollars, while the pound sterling lost 0.35% to 1.2367 dollars.

The New Zealand dollar fell -2.23%, hurt by the surprise decision of the New Zealand central bank to end its monetary tightening cycle after raising its key rate to 5.5%, at most high for 14 years.

RATE

The yield of the ten-year German Bund ended down 1.2 basis points, at 2.45%, after having oscillated in the session up to 2.501% according to the macroeconomic indicators of the day.

That of US Treasury bonds of the same maturity takes about two points, to 3.7284% before the “minutes” of the Fed.

OIL

The oil market jumped after a sharp and unexpected drop in crude inventories in the United States last week and a warning from the Saudi Minister of Energy, interpreted as the beginning of a new reduction in the production of the countries of OPEC+.

Brent gained 1.67% to 78.12 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.8% to 74.22 dollars.

(Some data may show a slight shift)

(Written by Claude Chendjou, edited by Kate Entringer)

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