PARIS (Reuters) – European markets ended sharply higher on Monday, rebounding after the marked decline of the previous session linked to disappointing indicators and political uncertainty.
In Paris, the CAC 40 climbed 1.03% to 7,706.89 points, while the German Dax advanced 0.99% and the British Footsie rose 0.53%.
The EuroStoxx 50 index ended the session with an increase of 0.96%, compared to 0.85% for the FTSEurofirst 300 and 0.84% ​​for the Stoxx 600.
The indices are recovering after having fallen during the previous session but the prospect of several important meetings this week should help limit this rebound.
With the legislative elections next Sunday and the following, political uncertainty should continue to hover over French stocks while the CAC 40 shows a loss of 3.5% over the month of June, its largest monthly decline in more than ‘a year so far.
In France, “a political risk premium is still at work, both on equities and on bonds”, underline the strategists at Apicil AM, who add that “since the announcement of the dissolution, the markets have clearly corrected, but in a coherent manner.
The results of the first round on Sunday could liven up trading next week and help keep the markets alert in the coming days.
The first debate between the American presidential candidates will also be held on Thursday and could cause the markets to react.
More broadly, the inflation figures in the United States, expected on Friday, constitute the main indicator of the week while the Federal Reserve continues to rule out the prospect of a rate cut.
A surprise, either up or down, could restore monetary policy issues to their pre-eminence in the direction of the markets.
A WALL STREET
Wall Street hesitates mid-session before the publication of PCE inflation on Friday and after restrictive comments from member of the monetary policy council of the Federal Reserve Austan Godsbee.
At closing time in Europe, trading on the New York Stock Exchange indicated an increase of 0.88% for the Dow Jones, against 0.33% for the Standard & Poor’s 500, and a decrease of 0.19 % for the Nasdaq Composite.
VALUES
The automotive sector progressed as the European Union and China agreed to hold discussions around the customs duties that Brussels wishes to impose on electric vehicles manufactured in China. The automobile sub-index gained 1.75%.
The banking sector posted the strongest sectoral increase in the Stoxx 600, growing by 1.88% and thus erasing part of its losses triggered by the dissolution of the National Assembly in France.
Eurofins Scientific fell 16.15% after a note published by the American hedge fund Muddy Waters, which accused the French group of scientific laboratories of financial irregularities.
Valneva ended up 11.15% after the green light from the Canadian authority for the marketing of the vaccine against chikungunya developed by the French laboratory.
Argenx gained 9.06% after announcing on Saturday the approval by the American FDA of Vyvgart Hytrulo against chronic inflammatory demyelinating polyneuropathy.
Covestro rose 5.11% after the German chemical manufacturer confirmed negotiations for a takeover by Abu Dhabi National Oil Company (ADNOC).
RATE
Yields change little in a wait-and-see environment.
At the close of the rate markets in Europe, the yield on the ten-year Treasury rose 1 basis point (bp) to 4.2671%, compared to 1.3 bp for the two-year rate, to 4.7426%.
The yield on the German ten-year rose by 1.4 bps to 2.423%, while that of the two-year rate rose by 1.9 bps to 2.812%.
CHANGES
The dollar falls in a context of caution before the publication of PCE inflation in the United States.
The dollar lost 0.23% against a basket of reference currencies, while the euro gained 0.34% to 1.0727 dollars. The pound sterling strengthened by 0.29% to $1.2682.
OIL
Crude is up moderately, with investors estimating that demand will be greater than expected this summer.
Brent rose by 0.75% to $85.88 per barrel, American light crude (West Texas Intermediate, WTI) increased by 0.93% to $81.48.
(Written by Corentin Chappron)
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