by Claude Chendjou

PARIS (Reuters) – Major European stock markets, except Frankfurt, ended lower on Thursday on risk aversion ahead of French legislative elections, while Wall Street was little changed awaiting key indicators and before the first debate in the U.S. presidential election.

In Paris, the CAC 40 ended down 1.03% at 7,530.72 points. The British Footsie fell 0.55%. The German Dax, supported by real estate and industrial stocks, advanced 0.30%.

The EuroStoxx 50 index fell by 0.27%, the FTSEurofirst 300 by 0.44% and the Stoxx 600 by 0.43%.

At the close in Europe, the Dow Jones rose 0.21%, while the Standard & Poor’s 500 gained 0.02% and the Nasdaq advanced 0.21%.

Investors are awaiting the first debate between Joe Biden and Donald Trump which will take place on the night of Thursday to Friday, while on the economic front, the figures for the PCE price index will be published on Friday.

Data today was mixed, with the final first-quarter GDP figure coming in above the previous estimate and weekly jobless claims falling. New orders for key U.S.-made capital goods unexpectedly fell in May, while core durable goods orders fell 0.1% versus expectations for a 0.2% increase.

In Europe, on a sectoral level, distribution (-1.88%) and basic resources (-0.86%) suffered after the disappointing results of H&M and the downgrade of Anglo American.

In the bond segment, the yield on the French ten-year OAT exceeded 3.278%, compared to a peak of 3.242% for its Portuguese equivalent. The first round of early legislative elections in France is scheduled for Sunday in a very polarized election. A new televised debate is due to take place in the evening between the leaders of the three main coalitions while the polls show the National Rally (RN) in the lead, ahead of the left alliance and the presidential majority.

VALUES IN EUROPE

OVHcloud jumped 14.17% after reporting quarterly turnover on Thursday that was up more than expected.

Kering gained 4.67%, with BofA Global Research upgrading the luxury group from “underperform” to “buy”.

Anglo American fell 1.48% as Berenberg cut its recommendation on the stock to “sell” from “hold”, citing concerns over the group’s new strategic plans.

H&M plunged 12.97% after reporting second-quarter profit on Thursday that fell short of expectations and warned of a drop in sales in June, casting doubt on its annual operating margin target.

EXCHANGES The dollar fell 0.15% against a basket of reference currencies but remained close to the nearly two-month high reached Wednesday at 106.13 points.

The euro gained 0.24% to $1.0705, but was heading for a 1.4% loss for the month as a whole due to political risk in France.

RATE

The yield on the ten-year German Bund ended stable at 2.448%, but the spread with its French equivalent of the same maturity climbed by more than nine basis points (bps), to 81.65 bps.

In the United States, the yield on ten-year Treasury bonds fell by almost three basis points to 4.2864%.

OIL

Oil prices are benefiting from the risk of a supply disruption against a backdrop of growing geopolitical tensions in the Middle East: Brent rose 0.47% to $85.65 per barrel and American light crude (West Texas Intermediate, WTI) 0.35% to $81.18.

(Written by Claude Chendjou, edited by Zhifan Liu)

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