by Diana Mandia
(Reuters) – European stock markets ended higher on Monday, driven by positive signals from China pending decisions by the European Central Bank (ECB) on interest rates and the publication of data on inflation in the United States.
In Paris, the CAC 40 ended up 0.52% at 7,278.27 points. The British Footsie gained 0.25% and the German Dax 0.36%.
The EuroStoxx 50 index recorded a gain of 0.44%, the FTSEurofirst 300 by 0.38% and the Stoxx 600 by 0.38%.
Data released over the weekend on inflation in China, which returned to positive territory in August, fueled general risk appetite, with investors on the lookout for any signs that Beijing’s measures to stimulate growth in the world’s second largest economy are bearing fruit.
In Europe, and in the absence of indicators during the day, the markets also remained focused on the ECB’s general policy meeting, which could lead on Thursday to the announcement of a status quo on interest rates according to a majority of economists interviewed by Reuters, who appear very divided on the future.
The debate focuses in particular on the impact of monetary tightening on the economy, while, in the wake of weak indicators in recent weeks, the markets learned on Monday that the European Commission had lowered its growth forecasts for the euro zone to 0 .8% this year and 1.3% next year, due in particular to the expected difficulties in Germany.
According to Brussels, the sharp slowdown in the granting of bank loans shows that the tightening of monetary policy is materializing in the economy.
In the United States, where inflationary pressures are resurfacing, investors will follow the publication of consumer prices (CPI) for the month of August on Wednesday, which will be decisive in anticipating the future plans of the Federal Reserve (Fed), which must in turn make a decision on interest rates next week.
The basic resources compartment (+2.54%) pulled the Stoxx in the wake of rising metal prices, with investors betting on an improvement in demand in China.
The real estate index for its part gained 1.24% thanks to the hope of a lull in interest rates.
Covestro rose 3.8% as the German group began formal discussions with Abu Dhabi National Oil Company (ADNOC) on a takeover offer.
In Paris, Eramet rose 3% after the appointment by the junta which had just come to power in Gabon of Marcel Abeke, former director of Comilog, the Gabonese subsidiary of the mining group, to the post of Minister of Oil.
JCDecaux jumped 5.8% thanks to the raising of the Oddo BHF board to “outperformance” on the value, which recorded the best performance of the SBF 120, while Legrand lost 2.8% after the lowering of Citigroup’s recommendation to “sell” on the stock.
Societe Generale, for its part, gained 1.72% after the launch of a 10 billion euro private debt fund with Brookfield.
A WALL STREET
At closing time in Europe, the Dow Jones gained 0.07%, the Standard & Poor’s 500 0.35% and the Nasdaq Composite 0.58%, the latter supported by Tesla’s jump.
The dollar, which experienced its eighth consecutive weekly increase last week, the longest series in this direction since 2014, fell by 0.5% against a basket of reference currencies before American inflation, while the euro EUR= advances 0.38% to 1.074 dollars.
In Asia, the yen strengthened by 0.91% to 146.46 yen per dollar, supported by the words of Kazuo Ueda, governor of the Bank of Japan, who raised the hypothesis of an end to the policy of negative rates in the archipelago.
Eurozone bond yields rose on Monday, ahead of the ECB meeting, as the yield on ten-year Japanese government bonds reached its highest level in almost 10 years.
The yield on the German 10-year Bind thus gained more than 4 basis points to 2.64%, and that of the two-year rose by almost 3 bp to 3.09%.
In the United States, the yield on 10-year Treasuries also increased by more than 3 basis points to 4.29%, while the two-year rate increased by 0.4 basis points to 4.98%.
Oil prices are down slightly at the close of stock markets in Europe after jumping last week with concerns about supply following production cuts decided by Russia and Saudi Arabia.
Brent fell 0.02% to $90.63 per barrel, with American light crude (West Texas Intermediate, WTI) dropping 0.16% to $87.37 CLc1.
TO BE CONTINUED ON TUESDAY:
(Written by Diana Mandiá)
Copyright © 2023 Thomson Reuters
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.