PARIS (Reuters) – The main European stock markets are on the downside on Thursday morning after the publication of new economic data which show that Germany entered a recession in the first quarter while the market expects in the afternoon a US GDP statistics.

In Paris, the CAC 40 dropped 0.71% to 7,202.17 points around 07:40 GMT. In London, the FTSE 100 fell 0.34% and in Frankfurt, the Dax lost 0.61%.

The EuroStoxx 50 index fell by 0.23%, the FTSEurofirst 300 by 0.02% and the Stoxx 600 by 0.25%.

Futures contracts on Wall Street predict a drop of 0.19% for the Dow Jones but a rebound of 0.32% for the Standard & Poor’s 500 and 1.42% for the Nasdaq the day after a session in the red marked by the publication of the minutes of the meeting of May 2 and 3 of the Fed.

These “minutes” show divergences on the path of interest rates, even if Fed officials “broadly agreed” that the need to continue to raise the cost of credit had become “less certain”.

Pending the second estimate of US GDP for the first quarter, due at 12:30 GMT and the PCE price index in the US, due Friday, markets are pricing in a 33.6% chance of another rate hike. the Fed by 25 basis points in June versus a 28% probability last week, according to CME Group’s FedWatch Barometer.

In Europe, Germany, the continent’s largest economy, recorded a contraction of 0.3% in its GDP in the first quarter of 2023 after a decline of 0.5% in the fourth quarter of 2022.

Investors are also still waiting for an outcome on the raising of the US debt ceiling while progress on the subject remains timid and the rating agency Fitch has placed the country’s rating under surveillance.

On the stock market, the European new technologies sector reacted Thursday to the results of Nvidia published the day before which exceeded expectations. The sector index gained 1.56%. ASMI, ASML, AMS Osram and BE Semiconductor Industries take from 1.91% to 6.86%, while in Paris STMicroelectronics loses 0.73%. Soitec (+4.61%) benefits from the recommendation of Morgan Stanley, which is starting to monitor the value to be “overweighted”.

Apart from “techs” and health, all the other major compartments of the Stoxx 600 are in the red.

In other results, the Italian insurer Generali advances by 1.01% after confirming all the financial objectives of its 2024 strategic plan on Thursday and reports a jump of nearly 50% in its adjusted profit in the first quarter.

(Written by Claude Chendjou, edited by Blandinee Hénault)

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