by Claude Chendjou
PARIS (Reuters) – European stock markets ended slightly higher on Monday against a backdrop of easing on the bond and oil markets, while optimism on Wall Street before the decisions of the American Federal Reserve (Fed) supports the indices at mid- session, particularly in the new technologies compartment.
In Paris, the CAC 40 ended with a gain of 0.44% to 6,825.07 points. The British Footsie advanced 0.50% and the German Dax gained 0.20%.
The EuroStoxx 50 index increased by 0.35% and the FTSEurofirst 300 by 0.38%. The Stoxx 600, which fell by more than 4% over the last two weeks, rebounded by 0.36%.
At the close in Europe, the Dow Jones advanced by 1.03%, the Standard & Poor’s 500 by 0.60% and the Nasdaq by 0.56%.
Investors ignored the latest developments from the Gaza Strip, where the Israeli army says it is moving forward “according to plan”, to focus on economic indicators, company results and the next decisions of central bankers.
Apple, the world’s largest capitalization, and Novo Nordisk, the largest European capitalization, publish their results on Thursday while Stellantis and Thales are expected on Tuesday and Société Générale on Friday.
In terms of macroeconomic data, inflation slowed in October in Germany to 3% year-on-year, its lowest level since August 2021, which could be a sign of a more general trend across the entire euro zone, including the figures will be published on Tuesday.
Concerning the evolution of the GDP of Europe’s largest economy, Germany escaped a recession contrary to forecasts, growth in the second quarter having been revised upwards to 0.1%, while that of the first quarter finally showed stagnation instead of contraction.
On the bond market, this resulted in a decline in ten-year German Bund yields, falling during the session to 2.763% compared to a 12-year peak reached at the beginning of October, at 3.024%.
In the United States, the evolution of bond yields compared to their recent peaks remains measured pending the decisions of the Fed which begins a two-day meeting on Tuesday and details on the schedule of Treasury debt issues for the fourth quarter of 2023 and the first quarter of 2024.
Technology stocks like Nvidia, Amazon, Meta Platforms, Alphabet gain from 1.3% to around 3%, while the communication services and “tech” sectors advance respectively by 1.7% and 0.53%.
VALUES IN EUROPE
ArcelorMittal was penalized (-3.89%) by a deadly fire in a coal mine operated by its subsidiary in Kazakhstan which could be nationalized.
Dassault Systemes took 2.25%, JPMorgan having moved to “overweight” on the group. Semiconductor stocks such as Infineon (-6.35%), STMicroelectronics (-6.02%) and Aixtron (-4.58%), on the other hand, suffered from lowering price targets in the sector.
Siemens Energy climbed 12.66% following the announcement of continued negotiations with the German state on aid.
CHANGES
The dollar fell 0.32% against a basket of reference currencies in a context of risk appetite.
The euro gained 0.38% to 1.0604 dollars and the pound sterling traded at 1.2142 dollars (+0.16%). The Bank of England (BoE) will hold its monetary policy meeting on Thursday.
The Japanese currency is trading at 149.14 yen per dollar, down 0.31%, on the eve of monetary policy decisions by the Bank of Japan (BoJ), with uncertainty remaining over a possible change in its policy .
RATE
On the bond market, yields on the ten-year and two-year German Bund ended down approximately one point and two basis points respectively, at 2.826% and 3.078%.
The yields on US Treasury bills with the same maturities increased at the same time respectively by five points, to 4.9006%, and by three points, to 5.0436%. The ten-year briefly crossed the 5% threshold this month.
OIL
The ebbing of fears over an escalation in the conflict between Palestinian Hamas and Israel is weighing on the oil market: Brent lost 2.6% to 88.13 dollars per barrel and American light crude (West Texas Intermediate, WTI) lost 3 .11% to $82.88.
(Written by Claude Chendjou, edited by Bertrand Boucey)
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