by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected on a mixed note on Friday for the last session of a week dominated by numerous company publications while the indices are close to their record levels.
According to the first available indications, the Parisian CAC 40, rich in luxury stocks, should lose 0.16% at the opening, while Hermès and L’Oréal have published their quarterly accounts. The Dax in Frankfurt could fall by 0.01% while it is close to its absolute high of 17,049.52 points. The FTSE 100 in London is expected to gain 0.07%. The EuroStoxx 50 index is expected to increase by 0.06%.
After Thursday marked by huge publications of company results, the luxury sector, which gained 2%, should still attract attention in Europe with notably Hermès and L’Oréal, which reported an increase of their sales in the fourth quarter.
Investors also continue to monitor indicators on the evolution of the trajectory of interest rates while several central bankers recently stressed that a drop in the cost of credit was not imminent. François Villeroy de Galhau, the governor of the Bank of France, however estimated on Friday that inflation is heading towards “2% next year”.
Figures released this Friday show that inflation in Germany reached 3.1% year-on-year in January, after an increase of 3.8% in December.
On the economic side, the Banque de France (BdF) forecasts growth in gross domestic product (GDP) between 0.1% and 0.2% in the first quarter, after two quarters of stability, while a recession remains feared.
A WALL STREET
The New York Stock Exchange ended higher on Thursday, the S&P-500 having briefly reached the threshold of 5,000 points at the end of the session – a first – while investors took into account quarterly results, employment data and comments from Federal Reserve (Fed) officials.
The Dow Jones index gained 0.13%, or 48.97 points, to 38,726.33 points.
The broader S&P-500 gained 2.85 points, or 0.06%, to 4,997.91 points.
The Nasdaq Composite advanced 37.07 points (0.24%) to 15,793.72 points.
More than half of the S&P-500 companies have published their quarterly results. Of these, 80.6% exceeded expectations, according to LSEG data.
ARM Holdings jumped 47.9% after saying it expected solid demand for its artificial intelligence (AI) chips.
Walt Disney rose 11.5% after reporting quarterly results above expectations and making several announcements: $3 billion share buyback program, 50% increase in dividend and acquisition of a stake in the publisher of Epic Games games.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index advanced 0.09% to 36,897.42 points, after reaching a new 34-year high during the session, thanks in particular to a depreciation of the yen, which fell to a two-month low of 149.37 per dollar.
The index was also driven by SoftBank (+8.72%), the parent company of ARM, whose shares soared on Wall Street. On the downside, Nissan tumbled 11.56% after lowering its forecasts, in a context of falling sales in China.
The broader Japanese Topix lost 0.19% to 2,557.88 points at the close.
The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) fell 0.3% on Friday but is heading towards an increase over the whole week, its longest series of weekly gains since June.
Trading was, however, lighter in Asia due to the closure of Chinese markets for the Lunar New Year holidays, while the session was cut short in Hong Kong.
VALUES TO FOLLOW IN EUROPE:
CHANGES
The dollar is stable (-0.01%) against a basket of reference currencies
The euro is practically unchanged (-0.01%), at 1.0775 dollars, while the pound sterling stands at 1.2622 dollars (+0.05%).
The New Zealand dollar rose 0.58% to 0.6132 US dollars, the New Zealand central bank having surprised the market by announcing plans to increase its rates in February and April following a series of economic indicators more dynamic than expected.
Among cryptocurrencies, bitcoin, up 2.18% to $46,287, is expected to record its best weekly performance in two months, with a gain of more than 6% at this stage.
RATE
On the bond market, the yield on ten-year US Treasury bonds fell by around two basis points, to 4.1579%, after an increase of more than five points the day before, with Fed officials insisting on the that more evidence is needed that inflation will return to the 2% target.
The yield on the ten-year German Bund rises 1.5 basis points to 2.37% after a gain of 5.5 basis points on Thursday linked to the downward revision of rate reduction expectations from the European Central Bank (ECB).
OIL
The oil market is down slightly on Friday but is expected to record a weekly gain of more than 5% following Israel’s rejection of Hamas’ ceasefire offer.
Brent fell 0.16% to $81.50 per barrel and American light crude (West Texas Intermediate, WTI) fell 0.04% to $76.19.
(Writing by Claude Chendjou, edited by Kate Entringer)
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