PARIS (Reuters) – The main European stock markets are trending in the red on Thursday in early trading against a backdrop of a strengthening dollar and a rise in bond yields following announcements from the American Federal Reserve and before those from the Bank of England (BoE).
In Paris, the CAC 40 lost 1.06% to 7,253.36 points around 07:15 GMT. In London, the FTSE 100 lost 0.52% and in Frankfurt, the Dax lost 0.67%.
The EuroStoxx 50 index fell by 0.88%, the FTSEurofirst 300 by 0.67% and the Stoxx 600 by 0.63%.
Futures contracts on Wall Street predict a drop of 0.12% for the Dow Jones, 0.21% for the Standard & Poor’s 500 and 0.31% for the Nasdaq the day after a session already in decline.
The Fed, as expected, maintained the fed funds rate target at 5.25%-5.50% on Wednesday, but at the same time warned that its monetary policy could remain at a restrictive level for longer. than expected, which scares investors.
Futures contracts show that Fed rates will remain above 5% until at least September 2024, while Goldman Sachs has pushed back a possible drop in the cost of credit in the United States to the fourth quarter of 2024.
In addition to the Fed, the monetary policy decisions of the Swiss, Norwegian, Swedish and British central banks expected during the day provide little incentive for risk-taking.
While a pause is expected at 11:00 GMT on Bank of England rates, inflation having posted a surprise slowdown in August the day before, questions remain about the bank’s terminal rate.
The strengthening of the dollar and tensions on the bond market are weighing on the European new technologies compartment, which is down 1.77%.
In Paris Worldline, STMicro and Capgemini dropped 1.99%, 0.51% and 1.15% respectively, while SAP, Infineon and ASML fell from 0.36% to 1.01%.
Growth stocks like LVMH (-1.35%) or Kering (-0.87%) in the luxury sector are also in decline.
In terms of corporate results, Valneva gained 3.94% thanks to a reduction in its net loss in the first half, while in London Next and Jd Sports Fashion advanced respectively by 1.52% and 5.11% after their annual forecasts.
(Written by Claude Chendjou, edited by Blandine Hénault)
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