PARIS (Reuters) – Major European stock markets were trending higher on Friday morning amid optimism over hopes of an imminent drop in U.S. interest rates.
In Paris, the CAC 40 gained 0.39% to 7,726.17 points at around 07:30 GMT. In London, the FTSE 100 gained 0.39% and in Frankfurt, the Dax gained 0.63%.
The EuroStoxx 50 index rose by 0.55%, the FTSEurofirst 300 by 0.40% and the Stoxx 600 by 0.45%.
Futures on Wall Street are predicting a rise of 0.09% for the Dow Jones, 0.07% for the Standard & Poor’s 500 and 0.13% for the Nasdaq the day after a public holiday in the United States.
The positive trend in Europe remains fragile, however, as several macroeconomic indicators will be published during the day, including monthly employment figures in the United States, which give hope for confirmation of the fall in borrowing costs.
Traders are pricing in a 73% chance of a Fed rate cut in September, according to CME Group’s Fedwatch Barometer.
Stock market gains were also supported by the decline in fears about France, with an OpinionWay-Vae Solis poll released on Friday showing that the National Rally (RN) will not be able to obtain an absolute majority in Parliament following Sunday’s vote, which allowed the euro to hit a three-week high of 1.0825 to the dollar.
The yield gap on the bond market between German and French ten-year rates continues to narrow, below the 70 basis point threshold (68.6 bps).
The single European currency is also supported by the adoption in Germany of a draft budget for 2025, according to a source.
In the United Kingdom, the landslide victory of Keir Starmer’s Labour Party in the general elections is boosting the pound sterling, which is trading at 1.2776 to the dollar, and sectors such as real estate (+2.03%).
In terms of values, Atos, which is very volatile, is now down 4.52% after opening higher. The group announced on Friday that it had obtained short-term financing and was aiming for a restructuring agreement in July.
Eurofins Scientific is up 3.52% after the group issued new denials on Friday to accusations of financial wrongdoing by Muddy Waters.
Shell shares fell slightly (-0.15%) after the announcement of an impairment charge of up to two billion dollars following the sale of its Singapore refinery and the halting of construction of a biofuel plant in Rotterdam.
Varta soars 21.42% on the back of the German battery manufacturer’s announcement of talks with Porsche (+0.8%) for a possible investment in its V4Drive lithium-ion battery business.
(Written by Claude Chendjou, edited by Kate Entringer)
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