by Diana Mandia

PARIS (Reuters) – The main European stock markets are expected to fall at the opening on Thursday, after a record session the day before for the Stoxx, while investors digest political announcements in France, where President Emmanuel Macron has promised to appoint a new Prime Minister within 48 hours.

Markets will also remain attentive to the situation in the Middle East after Israel and Hamas approved the first phase of Donald Trump’s plan to end the war in the Gaza Strip.

According to the first available indications, the Parisian CAC 40 could lose 0.11% at the opening.

Futures contracts report a decline of 0.06% for the Dax in Frankfurt and 0.49% for the FTSE in London. The Stoxx 600 is expected to decline by 0.28%.

The session, although rather poor in new macroeconomic data, promises to be rich in important political events likely to influence investor morale.

In France, where the unexpected resignation of Prime Minister Sébastien Lecornu shook the markets at the start of the week, a new head of executive should be appointed within 48 hours by Emmanuel Macron, the Elysée announced on Wednesday evening.

After two days of consultations with political parties, the short-lived tenant of Matignon believes in particular that a majority of deputies are against the dissolution of the National Assembly and that a path is possible for the adoption of a budget by December 31.

Investors will also be watching the implications of overnight announcements regarding the Middle East, after Israel and Hamas gave the green light to the first phase of the White House plan to end the war in Gaza, which has raged in the Palestinian enclave for two years. For now, the news is having an impact on oil prices, which are falling thanks to the prospect of an easing of tensions.

Trade is also likely to weigh, as China on Thursday strengthened its controls on exports of rare earths, widening restrictions on processing technologies and banning unauthorized cooperation with foreign countries and notably targeting shipments in the fields of defense and semiconductors.

In the euro zone, investors will know at 11:30 GMT the minutes of the last meeting of the European Central Bank (ECB), during which the institute, as expected, left its key rates unchanged, after a similar decision in July.

All this in a context marked by enthusiasm around artificial intelligence (AI), particularly in the United States, where the latest “minutes” from the Federal Reserve (Fed), published on Wednesday, did not call into question the prospects of lowering rates at the next meetings of the central bank.

VALUES TO FOLLOW: [L5N3VP17Z]

A WALL STREET

The S&P 500 and the Nasdaq Composite closed at records on Wednesday on the New York Stock Exchange, still driven by hopes placed in artificial intelligence, while waiting to see more clearly on the economic situation.

The S&P 500 gained 0.58% and the Nasdaq Composite gained 1.12%. The Dow Jones finished stable at 46,601.78 points.

IN ASIA

In Japan, the Nikkei of the Tokyo Stock Exchange rose 1.51% to 48,457.29 points, thanks in particular to the sharp rise in SoftBank shares, which announced on Wednesday that it had bought the robotics division of the Swiss group ABB, thus pursuing a strategy aimed at merging robotics and artificial intelligence.

In China, stock markets reached their highest level in more than ten years on Thursday, supported by stocks linked to semiconductors, gold and artificial intelligence, after a week of vacation.

The Shanghai Stock Exchange Composite Index rose 1.15% and the CSI 300 of large caps rose 1.5%.

The Hong Kong Stock Exchange gained 0.69%.

RATES / EXCHANGES

The yield on ten-year Treasuries fell slightly to stand at 4.1268%.

On the foreign exchange market, the euro is regaining some ground after reaching a six-week low in the last few hours, weighed down by the political crisis in France and data published on Wednesday showing that German industrial production had suffered its biggest monthly decline in more than three years in August.

The European currency gained 0.16% to 1.1645 dollars, while the greenback lost 0.19% against a basket of reference currencies.

OIL

Oil prices are falling after Israel and Hamas reached an agreement on the first phase of a US plan to end the war in Gaza, easing geopolitical tensions in the Middle East, while the strength of the US dollar weighs on commodities.

Brent lost 0.38% to $66.00 per barrel and American light crude (West Texas Intermediate, WTI) 0.48% to $62.25.

(Written by Diana Mandia, edited by Blandine Hénault)

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