by Claude Chendjou
PARIS (Reuters) – European stock markets ended mixed on Thursday, with Wall Street in the red midway through a volatile session as investors digested announcements from the European Central Bank (ECB) and mixed corporate results.
In Paris, the CAC 40 ended with a gain of 0.21% at 7,586.55 points, driven in particular by Publicis. The British Footsie advanced by 0.21%. The German Dax fell by 0.40%.
The EuroStoxx 50 index fell by 0.44% and the FTSEurofirst 300 by 0.27%. The Stoxx 600 ended down (-0.16%), despite support from the energy sector (+1.07%).
European stock indices alternated during the session between one foot in the red and the other in the green in a narrow trading range, a sign of investor hesitation after four consecutive sessions of decline marked in particular by a decline in technology stocks against a backdrop of concern over worsening trade tensions between China and the United States.
The European new technology index (-1.8%) and its equivalent on the S&P 500 (-1.22%) tried in vain to rebound before falling back into the red.
At the time of the European closing, the Dow Jones fell by 0.60%, after having registered a record of 41,376 points. The Standard & Poor’s 500 fell by 0.72% and the Nasdaq lost 1.11%.
On the monetary policy front, the ECB chose on Thursday to maintain its key rates at their current levels while keeping room for maneuver for the future, its president Christine Lagarde considering the options “wide open” for the next meeting in September.
“We believe there is still a strong chance of a rate cut in September and expect markets to closely monitor payroll data due in late August,” said Massimiliano Maxia, fixed income specialist at Allianz Global Investors.
Immediately after the ECB’s decisions, stock indices extended their gains before ending in mixed order, with Daniel Morris, market strategist at BNP Paribas Asset Management, describing a “boring” meeting of the Frankfurt institute.
“The ECB faces a bigger dilemma than the Fed, because the US inflation data is surprisingly weak, while in the eurozone the inflation data is much higher and the recovery is not as strong as expected,” he said.
VALUES IN EUROPE
Publicis gained 2.98% thanks to the increase in its organic growth target for this year.
Maurel et Prom rose 3.74% after announcing a 37% increase in its turnover in the first half.
Nokia fell 4.97% as the Finnish group reported a 32% drop in second-quarter profit, weighed down by weak demand for 5G equipment.
Volvo rose 5.9 percent as the Swedish truck maker reported a bigger-than-expected rise in quarterly operating profit.
Swiss engineering group ABB fell 5.63% after a mixed second quarter, dragging Schneider Electric (-3.11%) down with it.
TODAY’S INDICATORS
UK wages excluding bonuses, a key indicator of inflationary pressures, rose 5.7% year-on-year in the three months to the end of May, official figures show.
In the United States, business conditions in the Philadelphia region improved in July with the Philly Fed index at 13.9 after 1.3 in June,
U.S. jobless claims rose to 243,000 last week, bolstering prospects of a slowdown in the labor market.
CHANGES The dollar strengthened by 0.33% against a basket of reference currencies on Thursday, its highest in four months.
The euro is trading at 1.0911 dollars (-0.24%) after the status quo on key rates decided by the ECB. The European currency is coming back from a four-month peak reached on Wednesday.
The pound fell 0.26% to $1.0911 after the UK wages indicator did not call into question the possibility of a rate cut in August.
RATE
The yield on the 10-year German Bund ended down 1.2 basis points to 2.432% after falling to a three-week low of 2.401% earlier in the session. The two-year yield was down about four basis points to 2.77%.
The yield on 10-year US Treasury bonds rose about three basis points to 4.1788%, but the market continues to price in a first rate cut by the Federal Reserve (Fed) in September.
OIL
Oil prices were broadly stable on Thursday, supported by expectations of an imminent U.S. interest rate cut following the release of jobs data and a larger-than-expected decline in U.S. crude inventories.
Brent gained 0.08% to $85.15 per barrel and light American crude (West Texas Intermediate, WTI) gained 0.14% to $82.97.
(Written by Claude Chendjou, edited by Camille Raynaud)
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