by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected to fall slightly on Friday, with the indices likely to take a break after their recent records linked to the strengthening prospect of a reduction in key rates from major central banks in the coming months .

According to the first available indications, the Parisian CAC 40 should lose 0.39% at the opening. The Dax in Frankfurt could fall 0.21%, while the FTSE 100 in London is expected to drop 0.07%. The EuroStoxx 50 index is expected to fall by 0.50%.

The Fed confirmed on Wednesday that it still plans three rate cuts this year despite the strength of inflation and the economy across the Atlantic, while the Central Bank of Norway and the Bank of England (BoE) have hinted at an easing of their monetary policy in the coming months. The Swiss National Bank (SNB) did not wait and lowered its key rate by 25 basis points on Thursday.

These announcements caused a decline in bond yields, a rush on metals, including gold which hit a record at 2,222.39 dollars per ounce, and a rally in stocks, allowing most stock indices in Europe to and in the United States to record new historic highs.

For today’s session, UK retail sales statistics show month-on-month stagnation in February after a 3.6% jump in January. Investors will learn at 09:00 GMT the Ifo business climate index in Germany, which could have an impact on the euro.

A WALL STREET

The New York Stock Exchange ended higher on Thursday, with its three main indexes hitting records, as investors were reassured by the Fed’s announcements and by gains in the semiconductor sector with optimistic forecasts from Micron Technology.

The Dow Jones index gained 0.68%, or 269.24 points, to 39,781.37 points.

The broader S&P-500 gained 16.91 points, or 0.32%, to 5,241.53 points.

The Nasdaq Composite advanced 32.43 points (0.20%) to 16,401.84 points.

Already reached records the day before at the end of the session, the main Wall Street indices once again benefited on Thursday from optimism on rates as well as the boom in the semiconductor sector.

Micron Technology jumped more than 14% to a record closing high after reporting a surprise quarterly profit and providing a better-than-expected revenue forecast for the current quarter.

Countering the trend of the day, Apple lost 4.1% after the US Department of Justice announced antitrust proceedings against the iPhone manufacturer for accusations of monopoly in the smartphone market.

For its stock market debut, Reddit saw its title reach $50.44, an amount 38% higher than the price of $34 set for its IPO.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index advanced 0.18% to 40,888.43 points, setting a record in the wake of Wall Street. The bout of weakness in the yen also pushed investors to buy automobile stocks, the index of which gained 1.72%. Toyota Motor took 1.92% and Suzuki Motor 3.63%.

The broad Topix index in Tokyo rose 0.61% to 2,813.22 points.

The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) lost 1.3%, weighed down by the fall in Chinese stocks.

In China, the Shanghai SSE Composite fell by 0.95% and the CSI 300 fell by 1.01% at the close.

“Sentiment (is) very fragile today,” noted Wong Kok Hoong, head of equities at Maybank, citing, among other things, fears over weak profits of Chinese companies and the persistence of unfavorable elements in the sector of real estate.

Washington also indicated Thursday evening that the main Chinese chip manufacturer SMIC may have violated American export rules to produce a chip intended for Huawei’s Mate 60 Pro phone.

VALUES TO FOLLOW IN EUROPE:

CHANGES

The dollar rose 0.26% against a basket of reference currencies heading towards a second weekly gain, despite the Fed’s rate cut prospects.

The euro fell 0.32% to $1.0825, while the pound sterling traded at $1.2616 (-0.32%).

The Swiss franc nibbles 0.18%, to 0.8991 per dollar, the day after a drop of more than 1% linked to the surprise decision of the SNB to reduce its key rates.

RATE

The yield on ten-year US Treasury bonds fell by around three basis points, to 4.2453%, compared to closing the day before at 4.272%.

That of the ten-year German Bund, benchmark for the euro zone, fell by 1.6 points, to 2.382%, after a drop of almost four points on Thursday.

OIL

Oil prices fell on Friday in the hope of an imminent ceasefire in the Gaza Strip which could ease geopolitical concerns in the Middle East.

The strengthening of the dollar and the drop in gasoline demand in the United States are also weighing on crude prices.

Brent fell by 0.61% to $85.26 per barrel and American light crude (West Texas Intermediate, WTI) by 0.6% to $80.58.

(Writing by Claude Chendjou, edited by Kate Entringer)

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