PARIS (Reuters) – European stock markets ended lower on Wednesday, amid renewed geopolitical tensions and rising bond yields.

In Paris, the CAC 40 dropped 0.91% to 6,965.99 points, while the German Dax lost 1.03% and the British Footsie 1.14%.

The EuroStoxx 50 index ended the session down 1.12%, compared to 0.99% for the FTSEurofirst 300 and 1.05% for the Stoxx 600.

Tensions in the Middle East had not eased at the close on Wednesday, despite the visit of American President Joe Biden to Israel, after the bombing of a hospital in Gaza which pushed Iran and Hezbollah to toughen their tone.

A sign of the nervousness of the markets, gold reached its highest level since early September during the session, while oil rose, worried about the ramifications of the conflict.

Added to the decline in risk appetite is the resumption of the rise in bond yields, while housing construction figures in the United States have rebounded significantly, providing further proof of the resilience of the American economy. to rate increases.

Paradoxically, good corporate results – Procter & Gamble and Morgan Stanley published better than expected results on Wednesday – are fueling concerns about the strength of American activity, which could force the Federal Reserve to maintain a restrictive posture for longer. than anticipated by the markets.

Investors are also encouraged to exercise caution as several central bank decisions will be taken in the coming weeks, which increases the importance of indicators and statements in the coming days. The rise in oil prices, the slowdown in developed economies with the exception of the United States, and geopolitical uncertainty will complicate the decisions of the big financiers, while inflation is falling but remains above the central banks’ objectives.

RATE

Yields are once again rising in a context of resistance in the American economy, which is raising fears that the Fed will keep its rates in restrictive territory for longer than anticipated by the markets. At the close of the European interest rate markets, the ten-year Treasury yield rose 6.4 bp to 4.9106%, the highest since 2007, while the two-year rate rose 2.1 bp to 5. 2354%.

The yield on the German ten-year rose by 3.7 bp to 2.919%, while that of the two-year rate rose by 1 bp to 3.256%.

VALUES

Nexi jumped 13.17% to the top of the Stoxx 600 after a press report that CVC Capital Partners was considering a potential bid for the payments company. Its French competitor Worldline gained 3.23%, leading the CAC 40, with investors expecting a future offer to be made for Worldline.

ArcelorMittal finished at the bottom of the CAC 40, falling 3.91% after Bank of America lowered its recommendation to “neutral”.

ASML fell 3.44%, as the semiconductor equipment manufacturer announced that it expected almost stable sales for 2024, which weighs on the sector. The new technologies index dropped 2.2%.

Genmab (8.66%) was the bottom of the Stoxx 600, after announcing weaker than expected results in the third quarter.

A WALL STREET

Wall Street retreats at closing time in Europe, worried about developments in the Middle East and the resistance of the American economy.

At closing time in Europe, trading on the New York Stock Exchange indicated a drop of 0.54% for the Dow Jones, compared to 0.75% for the Standard & Poor’s 500 and 0.79% for the Nasdaq. Composite.

CHANGES

The dollar is taking advantage of its safe-haven status and strengthening, while other currencies retreat in the face of uncertainty.

The dollar rose by 0.3% against a basket of reference currencies, while the euro lost 0.43% to $1.053. The pound sterling fell 0.26% to $1.2146.

OIL

Oil is recovering in a context of uncertainty over the situation in Israel, but giving up part of its gains at the start of the day after reassuring comments from OPEC.

Brent rose 1.38% to $91.14 per barrel, with American light crude (West Texas Intermediate, WTI) rising 1.53% to $87.99.

(Written by Corentin Chappron, edited by Kate Entringer)

Copyright © 2023 Thomson Reuters