PARIS (Reuters) – European stock markets ended in the red on Friday a difficult week for risky assets, marked by the “hawkish” declarations of the president of the American Federal Reserve Jerome Powell, and weaker than expected activity indicators.

In Paris, the CAC 40 fell 0.34% to 7,163.42 points, while the FTSE dropped 0.54% and the German Dax 0.99%, under pressure from the decline in Siemens Energy.

The EuroStoxx 50 index ended the session down 0.18%, while the FTSEurofirst 300 lost 0.30% and the Stoxx 600 0.34%. Over the week, the CAC 40 is down 3.05%, against a drop of 2.93% for the Stoxx, the largest decline since the banking turbulence in March for each of the two indices.

Statements by Jerome Powell and surprisingly large Bank of England and Bank of Norway rate hikes put pressure on risky assets, especially as PMI indicators confirm slowdown fears of the European economy.

The fall in risky assets could also have been triggered by the positioning of investors, who withdrew 15.12 billion dollars (13.89 billion euros) from global equity funds this week, against inflows of 16.04 billion. the previous week.

Next week should again be marked by statements from central bankers, with the European Central Bank’s annual forum taking place from Monday to Wednesday in Sintra, Portugal.

RATE

European bond markets were supported by PMI indicators below market expectations: the inversion of the German yield curve reached its highest since at least 1992, note Societe Generale strategists, at more than 80 points base.

“The 50 bp hikes by the Bank of England and the Bank of Norway took the markets by surprise and contributed to the flattening of the curve”, add the strategists

The yield on ten-year German government bonds fell 12bp to 2.3560%, compared to a 10.1bp drop for the 2-year Bund to 3.1690%, while the British two-year closed at its highest level since the beginning of 2008, at 5.1660% (+9.6bp over the session).

In the United States, yields on ten-year Treasuries fell 4.7 bp to 3.7521%, compared to a drop of 2.9 bp to 4.7714% for 2-year sovereigns.

VALUES

The only sectors in the Stoxx 600 to post an increase were the defensive sectors of healthcare, up 0.37%, and consumer staples, which gained 0.21%.

Siemens Energy posted the worst performance of the Stoxx 600, down 37.34%, as its Siemens Gamesa division faces quality issues that will be felt for years, and the financial impact of which is not yet quantifiable. .

SES Imagotag shares fell 58.27%, trailing the SBF120, following the publication on Thursday of a report by Gotham City Research that found the electronic labeling group’s financial accounts to be misleading.

GSK finished at the top of the Stoxx 600 (+4.82%), the pharmaceutical group having closed a first trial in the United States against its drug Zantac, accused of being carcinogenic.

AT WALL STREET

US equity indices suffered from statements by Jerome Powell this week and profit taking by global investors.

At closing time in Europe, the New York Stock Exchange continued its decline initiated at the start of the session, the Dow Jones declining by 0.55%, while the Standard & Poor’s 500 fell by 0.69%, and that the Nasdaq Composite lost 1.17%.

CHANGES

Taking advantage of its status as a safe haven asset, the dollar gained 0.52% against a basket of benchmark currencies, while the euro fell sharply during the session, under pressure from weaker than expected activity indicators, at $1.0885 (-0.65%).

The pound ended the session down 0.33% against the greenback at $1.2707.

OIL

Oil was heading lower for the week on Friday at the close of European trading, with concerns over the state of demand taking precedence over signals that crude supply remains constrained.

Brent lost 0.73% to 73.62 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.83% to 68.92 dollars. TO BE CONTINUED : [L8N38F3IU]

NOT

(Writing by Corentin Chapron, editing by Kate Entringer)

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