PARIS (Reuters) – The European stock markets experienced a contrasting session on Friday, ending on a marked decline after spending the first part of the day in the green, while Wall Street amplified its mid-session decline, all sectors combined.
Paris, the CAC 40 lost in closing 0.79% (52.4 points) 6,570.19 points after taking up to 1.12% and bordering on 6,700 points. In London, the FTSE 100 fell 1.19% and Frankfurt, the Dax – whose overhaul will take effect on Monday – dropped 1.03%.
The EuroStoxx 50 index closed 0.94%, the FTSEurofirst 300 1.04% and the Stoxx 600 0.88%.
At close in Europe, Wall Street was also in the red, with the Dow Jones shedding 0.49%, the Standard & Poor’s 500 0.69% and the Nasdaq Composite almost 1%. All the major sectors of the American coast were moving into negative territory, starting with high technologies and raw materials.
US stocks continue to suffer from uncertainties over corporate tax developments, while the approach of Federal Reserve monetary policy decisions (Wednesday) is prompting many investors to step back.
Another negative point for equities: the rally marked bond yields after a series of better-than-expected economic indicators, notably US retail sales on Thursday.
Finally, the American markets live the day of the “four witches”, the simultaneous exchange of options and futures on stocks and indices.
Over the week as a whole, the Stoxx 600 lost 0.97%, its third weekly decline in a row, and the CAC dropped 1.4%.
In Europe, the largest sector decline of the day was for the commodities compartment, whose Stoxx index fell 3.76%.
The magnitude of this decline is explained by the continued decline in the price of iron ore and by the revised lowering of Morgan Stanley’s price targets on several large mining groups such as Rio Tinto (-3.60%) or Anglo American. (-8.07%). In Paris, ArcelorMittal lost 4.16%.
On the upside, the transport and leisure sector (+ 1.24%) continued to benefit from hopes of a return to normal post-COVID after the rise in long-term forecasts from Ryanair (+ 1.59%) and the loosening of travel restrictions in the UK.
In Paris, the most spectacular increase of the day is for Innate Pharma, whose price soared 48.24% after the presentation by its partner AstraZeneca (-0.96%) of the first positive results of a study involving monalizumab, a molecule developed by the French laboratory, in the treatment of lung cancer.
In the euro zone, Eurostat confirmed the inflation figures in August, ie 0.4% against July and 3.0% on an annual basis, the highest figure recorded for nearly ten years.
In the United States, the morale of American households has improved slightly since the beginning of September, according to the preliminary results of the monthly survey of the University of Michigan, which also show an increase in inflation expectations, 4.7% over the one-year horizon.
Eurozone benchmark yields hit their highest level in more than two months, in the wake of the US bond market and after a Financial Times article that the European Central Bank plans to hit its inflation target of ‘by 2025.
The partial denial of the article by the ECB was not enough to stop the movement: the yield of the ten-year German Bund rose -0.265% and its French equivalent 0.067%, the highest since July 7.
At the time of the European close, the ten-year US was up nearly four basis points 1.3702% after a peak of 1.385%.
Expectations of reduced Fed purchases and the outlook for inflation have also benefited the dollar, which reached its highest level in three weeks against other major currencies (+ 0.23%).
On the contrary, the euro fell below $ 1.1735 for the first time since August 27.
At the same time, the British pound lost ground after news of an unexpected drop in UK retail sales in August.
The price of the barrel amplified its decline with the rise of the dollar but it still shows an increase of more than 2% over the whole of the week, as a consequence of the slowness of the resumption of production in the Gulf of Mexico.
Brent drops 1.08% $ 74.85 per barrel and US light crude (West Texas Intermediate, WTI) 1.39% $ 71.60.
by Marc Angrand