by Diana Mandia
(Reuters) – European stock markets rose again on Thursday mid-session, supported by defensive stocks, during a volatile session against a backdrop of a slowing European economy and while new signs of inflationary pressures in the States States heighten fears over interest rates.
Futures on New York indices signal an opening on Wall Street down 0.01% for the Dow Jones, 0.35% for the Standard & Poor’s-500 and 0.7% for the Nasdaq.
In Paris, the CAC 40 gained 0.32% to 7,217.43 around 11:05 GMT. In Frankfurt, the Dax takes 0.08% and in London, the FTSE advances by 0.34%.
The pan-European FTSEurofirst 300 index gained 0.02%, the euro zone EuroStoxx 50 gained 0.02% and the Stoxx 600 was unchanged.
Markets have been shaken in recent days by a resurgence of inflation risk following the decision by Russia and Saudi Arabia to continue cutting production, which has pushed up oil prices, as well as by the publication on Wednesday of the American ISM services index showing an acceleration in activity and a rise in input prices.
On the other hand, German industrial production, published on Thursday, fell slightly more than expected in July, illustrating the difficulties of the first economy in the euro zone.
Investors also learned on Thursday that economic activity in the euro zone had recorded growth of 0.1% in the second quarter, less than initially estimated (0.3%).
These indicators add to a series of worrying data showing a slowdown in economic activity in Europe, particularly in the services sector.
“Equity markets will remain under pressure in the coming months. In Europe, we are talking about stagnation, even recession,” said Rupert Thompson, chief economist of the Kingswood Group.
All eyes are also on the European Central Bank’s monetary policy meeting next week, as rising consumer inflation expectations in the eurozone have led markets to increase their bets on higher prices. rate of 25 basis points (bp), even if the probability is less than 50%.
WALL STREET VALUES TO FOLLOW
The New York Stock Exchange is expected to open lower on lingering inflationary pressures, and as key Federal Reserve (Fed) officials are due to speak later in the day to assess the rate trajectory.
Large caps such as Tesla and Nvidia lost 1.5% and 2% respectively on the forefront.
VALUES IN EUROPE
Defensive sectors such as Utilities and Healthcare, considered relatively immune to economic cycles, benefited from economic and rate fears and gained 0.92 and 0.34% respectively.
The compartment of basic resources (-1.51%) and energy (-0.24%) suffered on the other hand after the disappointing figures for Chinese trade.
According to the Bloomberg agency, the United States and the European Union are also preparing new customs duties on steel from China and other countries, whose production is surplus.
Thyssenkrup sells 1.5% and ArcelorMittal 1%.
Shares in the interest-rate-sensitive tech sector shed 1.2% on the jump in US Treasury yields and fears over inflation fears.
In Paris, Valneva gained 1% after positive data from its vaccine candidate against Lyme disease and Scor 4.2% thanks to the launch of its new “Forward 2026” strategic plan, which should in particular enable the group to reach an economic value growth rate of 9% per year.
Elsewhere in Europe, Direct Line Insurance Group climbed 16% and Melrose Industries 5.7% after raising their respective annual profit forecasts.
RATE
Eurozone bond yields fall, halting a four-day rise, but on a cautious note amid concerns over inflation and the ECB’s possible response next week.
The ten-year German yield lost almost 3 bp to 2.62%, and like the two-year yield, which was 3.09%.
US bond markets are also down: the 10-year yield drops around 2 basis points to 4.27%, while the two-year yield falls 3 basis points to 4.99%.
CHANGES
In a volatile context, the dollar, perceived as a safe haven, gained 0.13% against a basket of benchmark currencies, while the euro lost 0.17% to 1.0709 dollars.
OIL
Oil prices are falling due to concerns over Chinese demand amid weak recent economic data from the Asian giant.
Brent lost 0.54% to 90.11 dollars a barrel, US light crude (West Texas Intermediate, WTI) falling 0.63% to 86.99 dollars.
(Written by Diana Mandia)
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I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
