PARIS (Reuters) – European markets ended higher on Monday, relieved by the withdrawal of U.S. President Joe Biden from the presidential race, while indicators and results helped to liven up trading.
In Paris, the CAC 40 advanced by 1.16% to 7,622.02 points, while the German Dax rose by 1.35% and the British Footsie by 0.53%.
The EuroStoxx 50 index ended the session up 1.46%, compared to 1.03% for the FTSEurofirst 300 and 1% for the Stoxx 600.
European markets welcomed Joe Biden’s withdrawal from the US presidential election, which could reduce the chances of his Republican opponent, Donald Trump, being elected.
He defends an economic program marked by isolationism and protectionism, which would weigh on the margins of European companies. The fall of European stock markets last week was largely explained by the assassination attempt against the former president, which strengthened his popularity.
“The market’s spontaneous reduction in term premia through yield curve flattening makes sense to us. In the near term, the prospect of a credible challenge to President Trump will ease growing market concerns of a large Republican victory,” said Aaron Rock, head of nominal rates at abrdn.
European investors will nevertheless remain attentive to the PMI indicators for July, expected on Wednesday, as the euro zone could slow down in the second half of the year.
In the United States, second-quarter GDP and PCE inflation for June are due on Thursday and Friday, two key indicators for the trajectory of US rates.
The results season continues, moreover, and will also liven up discussions this week.
Figures from LVMH, Hermes and BNP Paribas will be published in the coming days.
A WALL STREET
Wall Street is hesitant at mid-session, with investors positioning themselves cautiously ahead of several key indicators expected this week in the United States.
At the time of the European closing, trading on the New York Stock Exchange indicated a stable Dow Jones, against a rise of 0.5% for the Standard & Poor’s 500, and 0.98% for the Nasdaq Composite.
VALUES
Icade advanced 5.08% after announcing on Monday that its net loss had narrowed to 180.5 million euros in the first half, thanks to the effect of a smaller variation in the value of investment properties compared to the same period last year.
Valneva gained 5.74% after securing new funding for its chikungunya vaccine.
Ryanair plunged 16.51% after reporting a 46% drop in first-quarter after-tax profit on Monday and warning that summer fares would be “substantially lower” than last year.
Varta shares fell 69.83% as the German battery maker announced it was discussing two restructuring scenarios that could lead to a stake being taken by Porsche.
Ocado soared 11.08% as its US partner Kroger placed an order for a wide range of new automated technology for its warehouses.
Rentokil Initial rose 8.36% as the Sunday Times reported that former BT boss Philip Jansen is in talks to buy the British hygiene services specialist.
Belimo, which makes actuators for fans, jumped 16.78% after reporting better-than-expected first-half results.
RATE
Yields are hesitant in the United States, with Joe Biden’s withdrawal from the presidential election slightly reducing the probability of a victory for Donald Trump, with his costly economic program.
The yield on the 10-year Treasury is stable at 4.2408%, while the two-year is up 1.6bp at 4.5234%.
The yield on the German ten-year bond rose by 1.8 bp to 2.481%, and that of the two-year rate by 4.2 bp to 2.82%.
CHANGES
Foreign exchange markets are weak ahead of several key indicators due this week.
The dollar is down 0.04% against a basket of benchmark currencies, while the euro is up 0.03% at $1.088. The pound is down 0.05% at $1.2913.
OIL
Oil is falling as markets digest news of Joe Biden’s withdrawal, while China’s latest moves are seen as too minor to support the economy and demand for crude.
Brent fell by 0.7% to $82.05 per barrel, while American light crude (West Texas Intermediate, WTI) fell by 0.66% to $79.6.
TO BE CONTINUED TUESDAY:
(Written by Corentin Chappron, edited by Tangi Salaün)
Copyright © 2024 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
