Europe crimson, recession strikes markets – 06/29/2022 at 18:37
Europe ends in crimson
By Laetitia Volga
PARIS (Reuters) – European inventory markets tumbled on Wednesday amid renewed fears of a recession as main central banks tightened their financial coverage, led by the US Federal Reserve.
In Paris, the CAC 40 misplaced 0.9% to six,031.48 factors. The British Futsy misplaced 0.15% and the German Dax 1.73%.
The EuroStoxx 50 index fell 0.99%, the FTSEurofirst 300 0.44% and the Stoxx 600 0.67%.
At the shut of European buying and selling, the Dow Jones index was steady, due to the Goldman Sachs, backed by a change to BofA’s “Buy”, whereas the Standard & Poor’s 500 misplaced 0.2% and the Nasdaq Composite misplaced 0.4%. Concerned concerning the affect of tightening on the financial system.
Federal Reserve Chairman Jerome Powell informed the European Central Bank’s (ECB) annual discussion board in Portugal that there was a threat that the Fed’s rate of interest hike would gradual the financial system an excessive amount of. Duration
Several Fed officers have known as for a pointy rise in rates of interest to cut back inflation in current days, which can not reassure the market, in addition to a barely larger contraction than anticipated gross home product within the United States. The first quarter.
IG analyst Chris Beauchamp mentioned, “Jerome Powell’s remarks that the ‘ache’ concerned in controlling inflation can solely encourage extra buyers to hit the promote button.” A everlasting rebound appears unlikely. ”
German inflation in June introduced an sudden recession of 8.2% every year and a 0.1% month-on-month decline was not sufficient to assist the shares, particularly since ECB President Christine Lagarde thought of a reversal. A really brief interval of inflation is unlikely.
Carried out by simplifying segregation guidelines for international vacationers in China on Tuesday, wheeled bogies – reminiscent of the auto sector (-2.6%) – started to fall once more, hit by financial fears.
Only the protecting well being sector ended inexperienced (+ 0.73%).
In Paris, Sanofi (+ 1.52%) led the CAC 40 and Renault (-5.57%) was under the index. Elsewhere in Europe, H&M rose 2.2% after posting anticipated quarterly earnings. The largest drop within the Stoxx 600, an announcement from the managing director of Grubhub, an American subsidiary of Just Eat Takeaway, mentioned it was not about to promote.
The euro turned crimson after ECB President Christine Lagarde introduced a attainable finish to an period of very low inflation.
The single European forex fell 0.44% to 0 1.0472, the bottom in per week. The greenback, helped by its place as a secure haven, took 0.36% in opposition to a basket of worldwide currencies.
Swati Dhingra, who is ready to affix the Bank of England’s Monetary Policy Committee in August, misplaced about 0.5% in opposition to the pound sterling dollar. Economists say Britain’s central financial institution should tighten coverage very slowly because the financial system exhibits indicators of slowing nearer than anticipated.
Rates The yield on authorities bonds within the eurozone has fallen sharply: Germany has misplaced greater than 13 foundation factors at 1.506% in ten years and France has closed at 2.053% in ten years. Treasuries with the identical maturity decreased by 10.5 foundation factors to three.1022%.
Oil markets have soared as provide issues narrowly outpaced international financial issues.
Brent rose 0.05% to 11 118.04 a barrel and US gentle crude (West Texas Intermediate, WTI) rose 0.21% to 1 111.99.
(Writes Letitia Volga, with Olivier Sherfan, edited by Bertrand Bossi)