by Diana Mandia

PARIS (Reuters) – The main European stock markets are expected to be directionless at the opening on Monday, before a new week of corporate results and after closing in green on Friday thanks to reassuring American economic data and the hope of new cut in interest rates from the European Central Bank.

According to the first available indications, the Parisian CAC 40 could lose 0.2% at the opening.

Futures contracts report a decline of 0.28% for the Dax in Frankfurt, an increase of 0.08% for the FTSE in London and a decline of 0.18% for the EuroStoxx 50.

Stock markets are expected to open directionless on Monday after a turbulent week that was marked by a third ECB rate cut and a series of corporate results, and as the approach of the US presidential election, including the outcome could be extremely close, encouraging investors to be cautious.

European stock indices are stabilizing after benefiting last week from the prospect of an acceleration in the fall in borrowing costs in the euro zone, the ECB having decided last Thursday to reduce its financing costs for the third time since June and forecasting, according to sources, a further reduction in December.

The initial optimism sparked by the series of economic stimulus measures announced by Beijing at the end of September has also faded, with investors awaiting details on additional budgetary support.

In this sense, Monday’s announcement of a cut in key rates by the People’s Bank of China, widely anticipated, does not seem to further encourage the market.

“We may have to wait until the end of October or the beginning of November to get concrete plans at the National People’s Congress standing committee meeting,” said Chaoping Zhu, a strategist at JP Morgan in Shanghai.

About two weeks before the US election on November 5, bets on a victory for Republican Donald Trump are strengthening and supporting bitcoin and the greenback, the former president’s policies on customs duties, taxes and immigration being considered inflationary and therefore negative for bonds and positive for the dollar.

The week will also see a new deluge of corporate results from both sides of the Atlantic, including Tesla, the first of the “Magnificent Seven” to publish its quarterly figures in the coming days, as well as the PMI indices in the Eurozone and in China.

A WALL STREET

The New York Stock Exchange ended the week in the green on Friday, with closing records for the S&P-500 and the Nasdaq, driven by the technology sector and the streaming giant Netflix after its good quarterly results, as well as by data solid economics.

The Dow Jones index gained 0.09%, the broader Standard & Poor’s 500 gained 0.40% and the Nasdaq Composite advanced 0.63%.

IN ASIA

Chinese stock markets saw some volatility on Monday, while generally being supported by rising technology stocks after Beijing announced new measures to support the sector and the central bank lowered its key rate.

The Beijing Stock Exchange will notably help small and medium-sized technology companies obtain funds to go public, it announced on Sunday, as part of the government’s plans to encourage innovation.

The composite index of the Shanghai Stock Exchange rose 0.59% and the CSI 300 of large caps advanced 0.37% after oscillating between losses and gains earlier in the session.

The Hong Kong Stock Exchange fell 0.31%, affected by the fall in financial values.

In Japan, the Nikkei index of the Tokyo Stock Exchange rose by 0.1% to 39,020.67 points, supported by technology stocks, despite caution in the run-up to the legislative elections on October 27.

RATES/CHANGES

US Treasury yields are moving slightly on Monday after their recent increases.

The yield on ten-year Treasuries increased by 0.4 basis points to 4.0789% and two-year bonds fell by 0.2 basis points to 3.9531%.

On the foreign exchange market, the dollar is stable against a basket of reference currencies and the euro loses 0.04% to 1.0861 dollars.

Bitcoin also reached its highest level in three months during early trading on Monday, boosted by growing hopes of a victory for Donald Trump, whose policies are believed to be favorable to cryptocurrencies.

OIL

Oil prices are rising on Monday after falling more than 7% last week on concerns about demand in China, the world’s top importer, and easing fears about possible supply disruptions in the Middle East.

Brent gained 0.51% to $73.43 per barrel and American light crude (West Texas Intermediate, WTI) gained 0.59% to $69.63.

(Written by Diana Mandiá, edited by Augustin Turpin)

Copyright © 2024 Thomson Reuters