EQUITIES RISE, GEOPOLITICAL RISK REFRESHED
by Laetitia Volga
PARIS (Reuters) – Wall Street was expected to rise and European stocks rose slightly in mid-session on Wednesday, as the risk of an escalation between the United States and China appeared to be present, while bond yields rose. in reaction to the demonstrated determination. of members of the Federal Reserve to prevent inflation.
Futures contracts announced a gain of 0.36% for the Dow Jones and 0.44% for the Standard & Poor’s-500 and for the Nasdaq.
In Paris, the CAC 40 gained 0.38% to 6,434.38 by 11:50 GMT. In Frankfurt, the Dax gained 0.21% and in London, the FTSE gained 0.1%.
The pan-European FTSEurofirst 300 index rose 0.13%, the Eurozone EuroStoxx 50 0.51% and the Stoxx 600 0.25%.
The Speaker of the US House of Representatives, Nancy Pelosi, left Taiwan after a short visit where she showed US support and solidarity for Taiwan’s democracy, sparking anger in Beijing.
Even as China orders military maneuvers around Taiwan, investors expect Beijing’s response to remain pure showmanship, helping global stock rallies.
“Nancy Pelosi’s visit did not elicit a truly aggressive response from the Chinese authorities,” said AFS analyst Arne Petimezas.
This relative comfort of observers seems to prevail at the moment of the macro-economic disappointments of the morning, the fears of a possible global recession and the declarations of some presidents of the regional offices of the Fed, determined to interact- fight inflation. .
“Most equity indices have remained strong so far in August and investors continue to rejoice in a positive earnings season that has seen companies show resilience in an uncertain environment in economy,” said Pierre Veyret of ActivTrades.
“However, bull market drivers are few and far between, especially in the medium to long term, and investors will likely need more clarity on where economies are headed before pushing stock prices at new highs.” , added the analyst.
VALUES IN EUROPE
At the head of the CAC 40, Axa gained 5.84% after posting a net profit that rose 3% in the first half and Societe Generale gained 3.05% after reporting a lower-than-expected loss in the second trimester. .
Veolia fell 2.84% after its results.
In Frankfurt, Commerzbank rose 1.84% but BMW fell 5.92% after their results while Infineon gained 2.46% after publishing quarterly results above expectations and raising its outlook for turnover.
Tod’s soars to 20.29%, the founding family and main shareholder announced that it will launch a public tender offer for the part of the shares it does not already hold to remove the luxury group from the market.
Yields on benchmark government bonds rose after comments considered strict by Fed officials, raising hopes of further significant rate hikes by the institution to contain inflation.
That in ten years the American gained four basis points to 2.7829% and its equivalent in Germany increased by nine points to 0.876%.
“It is clear that Fed officials believe that market participants have too much lowered their rate hike expectations,” MUFG analysts said. “Fed’s ‘hawkish’ comments have immediate effect.”
In the currency market, the dollar was almost stable against a basket of reference currencies.
The euro traded around $ 1.018, up 0.16%, despite the decline in PMI indices and the drop in retail sales in the euro zone.
Oil prices rose ahead of OPEC+ announcements after a meeting where producing countries are expected to discuss a modest increase in supply of around 100,000 barrels per month. .
Brent gained 0.43% to $100.97 a barrel and US light crude (West Texas Intermediate, WTI) gained 0.56% to $94.95.
(Writing by Laetitia Volga, editing by Kate Entringer)