by Pauline Foret

(Reuters) – European stock markets ended lower on Monday after a particularly calm session, with the rise in bond yields on both sides of the Atlantic diverting investors from the stock markets.

In Paris, the CAC 40 ended down 0.57% at 7,313.56 points. At closing time in Frankfurt, the Dax fell 0.38% and in London, the FTSE 100 lost 0.35%.

The EuroStoxx 50 index is down 0.60%, the FTSEurofirst 300 by 0.50% and the Stoxx 600 by 0.48%.

U.S. Treasury yields rose above the 4.5% mark in early December amid speculation about the Trump administration’s monetary policy and expectations about the number of rate cuts by the Reserve federal in 2025.

“If yields remain this high, it will be a real headwind for stock prices as investors choose the relative safety of an almost guaranteed 5% return on US Treasuries in the face of stock volatility, including many are trading at record prices,” said David Morrison, senior market analyst at Trade Nation.

Trading volumes also remained particularly low in this last full session of 2024. The Euronext markets will only be open for half a session on the 31st and will be closed on January 1st.

VALUES

The BayWa group climbs 16.96% after reaching a restructuring agreement with its main shareholders and creditors.

A WALL STREET

Across the Atlantic, the main indices are moving in the red, also weakening under the pressure of bond yields while trade liquidity remains elusive.

At closing time in Europe, the Dow Jones lost 1.10%, the Standard & Poor’s 500 1.18% and the Nasdaq Composite 1.34%.

In values, large caps are weakening, weighed down by the rise in bond yields. Meta, Nvidia and Tesla, in particular, each lost between 0.67% and 2.05%.

Boeing lost 2.43% after a 737-800 crashed on Sunday while landing at Muan airport in South Korea, killing 179 people.

CHANGES

Aligning with US bond yields, the dollar continued to strengthen on Monday, gaining 0.25% against a basket of reference currencies.

The euro, which has experienced a few particularly gloomy months amid the political and economic crises in the European Union, lost 0.41% to 1.0384 dollars.

RATE

With investors turning to near-guaranteed returns from government bonds, bond yields are retreating somewhat on Monday after hitting record highs last week.

The yield on ten-year Treasuries fell 6.8 basis points to 4.5507% and two-year Treasuries lost 7.0 basis points to 4.2562%.

The yield on the ten-year German Bund gained 0.1 basis points to 2.3620%, while the two-year yield lost 0.2 basis points to 2.0880%.

OIL

Brent rose 0.26% to $74.36 per barrel and American light crude (West Texas Intermediate, WTI) rose 0.42% to $70.90.

TO BE CONTINUED ON TUESDAY:

The Euronext markets will be open for half a session on Tuesday and closed on Wednesday.

(Some data may have a slight lag)

(Written by Pauline Foret)

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