Risk appetite supports recovery in Europe

Claude Chengju

PARIS (Reuters) – European stocks rose on Tuesday, but Wall Street in the middle of the session was a mess, the rise was caused by profitable purchases of several major stocks after a two-month low on the European Stoxx 600, due to inflation. fears and risks of slowing global growth.

In Paris, the CAC 40 rose 0.51% to 6,116.91 points. The British Footsie rose by 0.37% and the German Dax – by 1.15%.

The EuroStoxx 50 index rose 0.79%, the FTSEurofirst 300 rose 0.78% and the Stoxx 600 rose 0.68%.

Although concerns about rising interest rates and the long-term risk of a global recession are far from over, investors were looking for hope during this volatile session, the pan-European Stoxx 600 hit a low on Monday, March 8 and on Wall Street, Nasdaq and S&P-500 , having lost 24% and 15% since the beginning of the year, respectively.

According to some analysts, in addition to cheap purchases, investors are betting on a pleasant surprise about the data on consumer prices in the US in April, which will be published on Wednesday. Inflation figures for Germany and China will be announced on the same day.

“On the eve of tomorrow’s inflation data, everything is calm, so it gives some respite to risky assets,” said Western Union Business Solutions analyst Joe Manimbo.

Corporate news has also increased risk appetite in Europe.

VALUES IN EUROPE

All major segments of the European stock market ended in the green, with the largest growth in finance (+ 1.42%) and new technologies (+ 0.52%), while the rebound in energy (+ 0.15%) was limited by fears , still present, about global demand.

BNP Paribas (+ 2.14%) took the lead among banks in CAC 40, and Italian Unicredit (+ 5.46%) stood out in Stoxx 600.

SAP, ASML and Stmicroelectronics were also looked for in the “techniques”.

In addition to these two sectors, Airbus (+ 0.8%) supported the publication of monthly deliveries and orders.

Renault, which fluctuated between rising and falling, ended in the red, despite the announcement of the entry of Chinese Geely in the capital of its South Korean subsidiary and the presentation of strategic goals Mobilize, its new brand of mobile services.

Swedish Match, a smoke-free tobacco specialist, jumped 24.9 percent as a result of mergers and acquisitions when Philip Morris began takeover talks.

ON VOL STREET

At the time of closing in Europe, the Dow Jones was down 0.26%, Standard & Poor’s 500 was up 0.12% and the Nasdaq was up 0.17%.

The session was volatile as the three indices opened sharply after three consecutive days of decline, thanks to the opportunistic purchase of resold securities.

Apple, Meta Platforms, Amazon, Microsoft, Tesla and Nvidia, which together lost more than $ 1 trillion in market capitalization after the Fed raised interest rates by half a point last Wednesday, have now risen only slightly. However, the index of “technology” remains higher by 0.9%.

In banks, Morgan Stanley fell 1.7% with the sector index, which lost 1.9% due to a sharp decline in bond yields.

In corporate news, the cinema operator AMC Entertainment fell 6.5%, despite better-than-expected quarterly revenue, and Novavax – by 7%, as the supply of vaccine against COVID-19 in the first quarter was disappointing.

Biohaven Labs up 70% after Pfizer (+ 0.8%) announces $ 11.6 billion (€ 11 billion) acquisition

INDICATORS OF THE DAY

Investor sentiment in Germany has improved since early May: the index rose to -34.3 from -41.0 in April, according to a survey by the ZEW Institute for Economic Research on Tuesday.

CHANGES

The dollar, which reached a 20-year high on Monday, is still rising 0.15% against a basket of international currencies in the run-up to a further Fed rate hike next month.

The euro, down 0.16%, traded at $ 1.0539.

In cryptocurrencies, bitcoin, which reached a nearly 10-month low on Tuesday, rose nearly 4% to $ 31,268. In November, it was still trading at $ 69,000.

RATE

Bond yields are falling as the market tries to assess inflation risks before publishing US consumer price data.

The ten-year rate fell 13 basis points to 2.945%, but the two-year rate was almost stable at 2.62%.

In Europe, the yields of the ten-year German Bund and French OAT with the same maturity fell by almost nine basis points to 1.003% and 1.549%, respectively, as investors decided to hedge after a recent rate hike. increase the cost of credit.

OIL

The oil market has been punished by both the strength of the dollar and the fear of falling demand in the context of health care restrictions in China.

Brent fell 2.26% to $ 103.62 a barrel, and US West Light Intermediate (WTI) fell 1.94% to $ 101.08.

(Report by Claude Shenju, edited by Jean-Michel Belo)