by CORENTIN CHAPPRON

PARIS (Reuters) – European stock markets ended higher on Thursday, reassured by British inflation and supported by good corporate results, despite US employment data which suggested that the Fed could raise its rates higher than anticipated by the markets. In Paris, the CAC 40 gained 0.79% to 7,384.91 points and the German Dax 0.59% against 0.76% for the British Footsie. The EuroStoxx 50 index ended the session up 0.26%, the FTSEurofirst 300 0.53% and the Stoxx 600 0.42%. Since the start of the results season, the figures published by European companies have generally been better than expected, supporting the equity indices, a trend which was confirmed on Thursday with the publication of better than expected quarterly results for Publicis or Telenor. Inflation figures for Britain and the euro zone, released on Wednesday, also confirmed that price dynamics in developed countries were slowing, reassuring investors. US indicators published on Thursday, however, contradicted this reading of a slowdown in inflation, synonymous with an imminent end to rate hikes. New jobless claims in the United States for the past week fell to 228,000, according to the Labor Department, as the Federal Reserve repeatedly stressed the importance of slowing labor markets to bring inflation back to target. This slowdown would be reached from the level of 280,000 new requests, economists said, and markets reassessed the future path of Fed rate hikes after the publication of the indicator.

SECURITIES Semiconductor-related stocks fell after TSMC raised concerns about the state of global demand for electronic chips. The technology sector ended down 2.48%, while the shares of ASML, ASM International, BESI, Soitec, STMicroelectronics, Infineon, ams-Osram or Siltronic fell between 1.5% and 5.7%. Conversely, the health sector pulls the Stoxx 600, Hikma and Fresenius flying in second (5.71%) and third position (6.39%) of the index, a tornado having hit a factory of their competitor Pfizer in the United States. In addition, Sanofi was supported by its announcement of a strategic collaboration with Recludix Pharma, and closed up 2.43%. Axa finished top (2.67%) of the CAC 40, supported by reports from Bloomberg that the group and AIG are considering selling their UK operations. Against the trend, Electrolux recorded its worst drop in a day, falling 20.3% at the bottom of the Stoxx 600, the group having announced organic sales down 8% in the second quarter.

A WALL STREET The US markets are hesitant, the poor results of technology companies weighing on the performance of the indices most exposed to the sector. At closing time in Europe, trading on the New York Stock Exchange showed no clear direction, with the Dow Jones appreciating 0.81%, while the Standard & Poor’s 500 lost 0.25% and the Nasdaq Composite fell 1.03%. RATES European yields rose again after falling earlier in the week, while weaker-than-expected unemployment figures in the United States raised fears among investors that the Fed might have to hike rates further, sending yields on US stocks soaring. The German 10-year yield ended up 5.4 bps at 2.451%, while that of the two-year rate rose 7.6 to 3.265%. The ten-year Treasury yield climbed 10.8bp to 3.8503%, while the two-year rate jumped 10.9bp to 4.8643%. EXCHANGES Unemployment figures and the revision of monetary policy scenarios in the United States supported the dollar, up 0.57% against a basket of benchmark currencies. The euro fell against the greenback by 0.58% to 1.1133% dollar, while the pound sterling lost 0.69% to 1.2848% dollar. OIL Oil posted moderate losses as investors continued to seek clear direction between shrinking US inventories, large Chinese purchases and global demand uncertainty in the second half. Brent fell 0.67% to 78.93 dollars a barrel, US light crude (West Texas Intermediate, WTI) losing 0.73% to 74.8 dollars. TO BE FOLLOWED ON FRIDAY:

(Report Corentin Chapron)

Copyright © 2023 Thomson Reuters