by Pauline Foret
(Reuters) – European stock markets ended lower on Thursday, weighed down by tepid trading on global markets with the day’s economic indicators and geopolitical tensions in the Middle East.
In Paris, the CAC 40 ended down 1.5% at 7,588.20 points, and the German Dax fell 0.9%.
The British Footsie, helped by the declarations of the Governor of the Bank of England, Andrew Bailey, on the possibility that the BoE becomes “a little more activist” and “a little more aggressive” in reducing its interest rates, lost 0.2%.
The EuroStoxx 50 index lost 0.94%, the FTSEurofirst 300 0.28% and the Stoxx 600 0.31%.
Investors had to digest in the morning the publication of several PMI indicators which showed that economic activity in the private sector in the euro zone had contracted in September, although the slowdown was not as pronounced as expected. Germany, France and Great Britain all reported a slowdown in services activity.
Across the Atlantic, data released earlier in the day indicated that jobless claims increased over the week, revealing some weakness in the US labor market, but that service sector activity increased more than scheduled for September.
Markets are also becoming increasingly concerned that Israel could target Iran’s oil infrastructure and escalate the escalation in the Middle East. According to Ashley Kelly, analyst at Panmure Gordon, such an operation could lead Iran to block the Strait of Hormuz or attack Saudi infrastructure, as was the case in 2019.
VALUES
In Paris, Française des Jeux lost 6.36% at the close after French media said the government intended to increase the tax on online games and betting from 2025 as part of the Social Security budget .
Bouygues lost 4.75% the day after the presentation of forecasts for its subsidiary Bouygues Telecom, saying it expected Services turnover and 2026 EBITDA to show modest growth compared to 2023.
In Milan, Stellantis lost 4% after Barclays lowered its recommendation on the stock, pulling the European automotive sector in its wake.
A WALL STREET
Wall Street also continues to suffer losses at mid-session this Thursday, weighed down by investor concerns around conflicts in the Middle East, despite data considered encouraging on service activity in the world’s largest economy.
Around 4:00 p.m. GMT, the Dow Jones lost 0.37% and the Nasdaq Composite while the Standard & Poor’s 500 stabilized, showing a slight decline of 0.06%.
TODAY’S INDICATORS
In Europe, the release of several PMI indicators showed that economic activity contracted in September across the euro zone.
Germany, France and Britain all reported a slowdown in service sector activity.
In the United States, jobless claims rose more than expected this week, fueling concerns about the health of the American economy.
On the other hand, the ISM services index stood at 54.9 in September compared to 51.5 in August, while economists were expecting 51.7, according to LSEG data.
RATE
US yields rose on Thursday after the release of data on jobless claims and the services sector.
The yield on ten-year Treasuries rises 3.6 basis points to 3.8209%, compared to 5.4 basis points to 3.6909% for the two-year.
The ten-year German Bund yield gained 0.2 basis points to 2.1390%, compared to 0.9 basis points to 2.0810% for the two-year.
On the other hand, British sovereign borrowing rates are falling following statements by BoE Governor Andrew Bailey to the Guardian.
EXCHANGE
In the wake of American yields, the dollar rose by 0.31% compared to a reference basket.
Andrew Bailey’s comments also caused the pound sterling to fall, which lost 1.14% against the dollar and 0.92% against the euro.
OIL
Oil prices continue to rise, with fears of a new escalation in the Middle East raising the risk of disruptions to oil flows from the region, and thus eclipsing the problems posed by too abundant a global supply.
Brent gained 3.79% to $76.70 per barrel, and American light crude (West Texas Intermediate, WTI) gained 4.02% to $72.92.
TO BE CONTINUED FRIDAY:
Friday October 4, the Francophonie summit opens in Villers-Cotterêts (Aisne).
In terms of indicators, the industrial production figures in France for the month of August will be published at 8:45 a.m., while the monthly report on job creation in the United States for the month of September will be published at 2:30 p.m.
(Written by Pauline Foret,)
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