by Augustin Turpin

(Reuters) – European stock markets ended lower on Tuesday and Wall Street is in the red at mid-session, the fall in energy sector values ​​with the drop in oil prices having dragged the indices down, in a context of reduced trade before the next meeting of the European Central Bank (ECB) on Thursday.

In Paris, the CAC 40 ended down 0.75% at 7,937.90 points. The British Footsie lost 0.35% and the German Dax 1.02%.

The EuroStoxx 50 index lost 0.93%, the FTSEurofirst 300 0.44% and the Stoxx 600 0.49%.

Trading was marked by strong risk aversion as operators await the ECB’s next decision on Thursday, which should see the institution lower its key rate. The latest data on inflation in the euro zone, however, have cast doubt on the prospect of an extension of monetary easing between now and the end of the year.

“We believe the ECB will revise upwards its quarterly inflation projections, which will create a difficult context for reduction,” said Gabriele Foà, portfolio manager at Algebris Investments.

“As things stand, we believe that an ECB cut this week could soon be seen as a political error,” he added.

The European energy sector fell 2.79% to reach its lowest level in two months, in the wake of the fall in oil prices, while operators worry about a possible increase in supply then even though the American economy is showing signs of weakening.

The sector was also weighed down by the fall in BP shares, which fell 3.8% after the S&P Global rating agency lowered its credit outlook on Monday.

VALUES

TotalEnergies lost 2.87% with the drop in crude prices and Allianz fell 3.06% following a lowering of its recommendation to “neutral” by Citigroup.

Deutsche Telekom drops 1.41% after announcing a temporary sixfold increase in its weekly volume of share buybacks, while the German public bank KfW announced on Monday a sale of 2.7 billion euros of its stake in the operator telecommunications.

A WALL STREET

At closing time in Europe, the Dow Jones lost 0.15%, the Standard & Poor’s 500 0.38% and the Nasdaq Composite 0.36%.

In terms of values, Exxon Mobil and Chevron dropped 2.58% and 1.59% respectively, while the energy sector of the S&P 500 fell 1.72%.

TODAY’S INDICATORS

The number of unemployed people in Germany increased more than expected in May, according to the latest figures from the Federal Labor Office, while the number of job openings in the United States fell more than expected in April , according to the latest “Jolts” (Job Openings and Labor Turnover Survey) report from the Department of Labor.

The French state budget deficit stood at 91.56 billion euros at the end of April.

CHANGES

The dollar is stable (+0.01%) against a basket of reference currencies, after falling to its lowest level since March against the euro and the pound sterling, signs of a slowdown in US economy strengthening the case for an early reduction in interest rates from the Federal Reserve (Fed). The euro lost 0.21% to 1.0879 dollars.

RATE

Bond yields in the euro zone are falling, as the European Central Bank (ECB) prepares to lower its key rates on Thursday for the first time since July 2022.

The ten-year German Bund yield lost 0.1 basis point (bp) to 2.5370%, and the two-year yield lost 0.3 bps to 2.9950%.

The ten-year US Treasury lost 6.1 bps to 4.3415%.

OIL

Oil prices are falling due to fears of an increase in supply, with OPEC+ giving eight of its members the option on Sunday to gradually end their voluntary reductions from October.

Brent dropped 1.57% to $77.13 per barrel, with American light crude (West Texas Intermediate, WTI) losing 1.7% to $72.96.

(Writing by Augustin Turpin, edited by Kate Entringer)

Copyright © 2024 Thomson Reuters