by Claude Chendjou
PARIS (Reuters) – European stock markets ended with slight variations on Thursday after the decision of the European Central Bank (ECB) to lower its key rates while calling for caution going forward.
At the close in Europe, the Dow Jones lost 0.18%, the Standard & Poor’s 500 lost 0.23% and the Nasdaq lost 0.35%.
This latest index, which crossed the symbolic bar of 20,000 points on Wednesday for the first time, consolidates on Thursday after an indicator showing that producer prices (PPI) in the United States increased faster than expected in November. Unemployment claims in the United States also rose more than expected last week, to 242,000.
These statistics, which do not meet expectations, hardly encourage risk-taking across the Atlantic.
In Paris, at the end of a seesaw session, the CAC 40 ended with a loss of 0.03% to 7,420.94 points. The British Footsie gained 0.12% and the German Dax gained 0.15%.
The EuroStoxx 50 index gained 0.17%, while the FTSEurofirst 300 fell by 0.14% and the Stoxx 600 by 0.17%.
The ECB on Thursday cut interest rates for the fourth time since the start of the year and left the door open for further cuts as economic growth is hit by political instability in the currency bloc and the threat of a new trade war with the United States.
As expected, the ECB reduced its deposit rate from 3.25% to 3%, but at the same time, during the press conference held by its president Christine Lagarde, stressed that the fight against inflation was not finished and warned of new risks.
These announcements weighed on the bond compartment where the yield of the German Bund, the benchmark for the euro zone, was volatile. Some investors, in view of the debates within the ECB, had hoped for a more marked drop in borrowing costs to revive growth in the bloc while according to the Ifo institute, German GDP could be limited to 0.4% next year.
VALUES IN EUROPE Sopra Steria fell 9.89% after the presentation of its objectives for 2204-2028.
Bruno Cucinelli jumped 8.25%, the Italian luxury group having revised upwards its turnover forecast for this year.
Lonza climbed 4.52% as the Swiss drugmaker announced plans to withdraw from the capsules and health ingredients businesses that had been a drag on the group’s growth.
Diageo took 2.72%, UBS having moved to “buy” on the spirits group.
CHANGES
The US dollar appreciates after higher than expected inflation, gaining 0.06% against a basket of reference currencies.
The Swiss franc lost 0.45%, to 0.8885 dollars, after the decision of the Swiss National Bank (SNB) to reduce its rates by 50 basis points.
The euro gained 0.11%, to 1.0507 dollars, after the ECB’s announcements.
RATE
The yield on German ten-year bonds briefly fell after the ECB’s decision, before ending with a gain of 5.6 basis points, to 2.189%.
The yield gap between the Bund and the ten-year OAT stood at around 78 basis points, while France still does not have a Prime Minister.
In the United States, the yield on ten-year Treasury bonds rose 2.9 basis points, to 4.3004%.
OIL
Oil prices are losing ground after forecasts from the International Energy Agency (IEA) which anticipates an excess supply on the market in 2025.
Brent fell 1.02% to $72.76 per barrel, while American light crude (West Texas Intermediate, WTI) dropped 1.12% to $69.50.
TO BE CONTINUED FRIDAY:
(Written by Claude Chendjou, edited by Sophie Louet)
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