The indices suffered the backlash of the day before: Paris fell by 0.74%, Frankfurt by 1.45% and Milan by 0.03%. Only the London Stock Exchange is advancing (+0.55%), thanks to the support of oil stocks.
Western markets retreated on Wednesday, erasing a small part of their jump the day before, as they scrutinized the continuation of negotiations on the war in Ukraine.
The European indices suffered the backlash of the day before: Paris fell by 0.74%, Frankfurt by 1.45% and Milan by 0.03%. Only the London Stock Exchange advanced by 0.55%, thanks to the support of oil stocks. In Zurich, the SMI lost 0.66%.
The Moscow Stock Exchange for its part chained a new session of strong rise, the RTS index denominated in dollars taking more than 7%.
Wall Street was down, after several sessions in the green: the Dow Jones lost 0.17%, the S&P 500 0.44%, the Nasdaq 0.58% around 4:00 p.m. GMT.
“The geopolitical turn of events weighs on risk appetite as the United States and its allies are skeptical of Russia’s commitment to reduce military activity near kyiv, as indicated in the latest round of talks,” noted Wells Fargo analysts.
Talks between Russian and Ukrainian delegations in Istanbul on Tuesday produced nothing “very promising” or “breakthrough”, the Kremlin said on Wednesday, contrasting with much more positive remarks by Russian officials having took part in the negotiations.
The consequences of the war in Ukraine on Western economies are also beginning to be measured: the influential group of economists who advise the German government on Wednesday slashed its 2022 growth forecast, from 4.6% to 1.8%. Inflation reached 7.3% in Germany in March over one year, and nearly 10% in Spain.
On the bond market, European rates were still stretched, the interest rate of the 10-year German Bund hovering around 0.64%.
The war had an economic impact marked by what “economists call a ‘supply shock’ which (…) accentuates inflation and reduces growth simultaneously”, warned Christine Lagarde, President of the European Central Bank ( ECB), at a conference in Cyprus.
Western central banks are facing high inflation and all have started to reduce their monetary support to the market, particularly in the United States.
The ADP report on private job creation painted the portrait of a labor market that was still tight, conducive to the continued tightening of the screws by the Fed. Private sector companies in the United States created 455,000 jobs in March, notably in services.
Exceptional net profit for BioNtech
The German pharmaceutical laboratory BioNTech, the origin of the first messenger RNA vaccine against Covid-19 with Pfizer, saw its net profit explode in 2021 to 10 billion euros, after 15 million the previous year, that of the first benefit from its history. The title, listed in the United States, soared 5.40%.
Tuesday’s winners step back
The sectors that benefited the most from the announcement of the progress of negotiations on Tuesday were at the back of the pack on Wednesday. This was the case for automotive (Renault -3.85%, BMW -2.87%), industry (HeidelbergCement -4.26%) or even banks (Santander -3.26%, Deutsche Bank -2.79%).
Conversely, defense (Thales +1.96%) or oil stocks (Shell +4.48%, Glencore +4.18% in London) were sought after after falling the day before.
Oil picks up, the euro strengthens
Distrust of Moscow’s real intentions caused oil prices to rise again.
Around 3:35 p.m. GMT, a barrel of Brent from the North Sea, the European benchmark, for delivery in May, took 3.12% to 113.67 dollars.
A barrel of American West Texas Intermediate (WTI) for delivery the same month gained 3.28% to 107.67 dollars.
The euro maintained its rise (+0.70%) against the greenback at 1.1164 dollars, around 3:50 p.m. GMT, at a level not seen since March 1.
Bitcoin fell 0.82% to $47,090.