PARIS (Reuters) – The main European stock markets, except Paris, rebounded on Tuesday morning in the wake of the Tokyo Stock Exchange as Japanese authorities tried to reassure the markets after the violent correction movement on Monday linked in part to the rise in the yen.

In Paris, the CAC 40 fell by 0.14% to 7,138 points at around 07:55 GMT, after a less marked drop on Monday than other European markets, by 1.42%. The Paris index was weighed down on Tuesday by energy and health stocks.

In London, the FTSE 100 rebounded by 0.25% and in Frankfurt, the Dax gained 0.55%.

The EuroStoxx 50 index rose by 0.42% and the FTSEurofirst 300 by 0.55%. The Stoxx 600, which fell to a more than six-month low on Monday, recovered by 0.67%.

Futures contracts on Wall Street predict a rise of 0.49% for the Dow Jones, 0.94% for the Standard & Poor’s 500 and 1.29% for the Nasdaq the day after a session in the red against a backdrop of investor concern over the economic outlook for the United States.

The publication on Monday afternoon of the figures for the activity of services in the United States, which came out at 51.4 in July after 48.8 in June, nevertheless reassured somewhat. Added to this were the accommodating statements of the president of the Chicago Fed, Austan Goolsbee, who distanced himself from the prospect of a recession.

In Japan, the Nikkei index, which fell more than 12% on Monday, its biggest drop since the crash of 1987, recovered 10.23% on Tuesday to 34,675 points. Japanese leaders, including Prime Minister Fumio Kishida, also called for calm on Tuesday as a crisis meeting was due to be held in the morning, born of the rise in the yen which forced investors to close their short positions on the currency.

Traders said Tuesday they were now reconsidering their initial reaction to the events, sending the VIX index of Wall Street volatility down nearly 15% but remaining elevated at around 32 points.

“Fundamentally, nothing significant has changed for the Japanese economy. It is the unwinding of carry trade positions that is driving much of the selling momentum,” noted Ray Sharma-Ong, head of multi-asset investment for Southeast Asia at Abrdn.

In Europe, the market rebound will be put to the test at 0900 GMT with euro zone retail sales figures expected to show a slowdown to 0.1% year-on-year in June, according to the Reuters consensus.

In the meantime, the positive trend on the Old Continent is driven primarily by the transport and leisure sector, which gained 2.1%, notably with Intercontinental Hotels Group (+1.01%). The owner of Holiday Inn announced on Tuesday a 3.2% increase in revenue per available room (RevPAR) in the second quarter.

Adecco climbed 5.39% thanks to the publication of an Ebita before exceptional items of 179 million euros, against a consensus provided by the group of 173 million.

Zalando rose 5.73% as Europe’s leading online fashion retailer reported an 18.5% rise in second-quarter operating profit.

Bayer is in the green (+0.63%) after confirming its outlook.

In Paris, Airbus gained 1.04% after reporting on Monday 77 aircraft delivered in July, while on the SBF 120 Coface jumped 5.04% after its half-year results.

(Written by Claude Chendjou, edited by Blandine Hénault)

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