2023-10-31 12:55:36
(Photo: 123RF)
MARKET REVIEWS. European stock markets rose significantly on Tuesday, after news of a slowdown in inflation in the euro zone, and elsewhere the markets were more mixed in the face of dense economic news.
Stock market indices at 7:45 a.m.
Futures contracts Dow Jones posted an increase of +124.00 points (+0.38%) to 33,141.00 points. Futures contracts S&P 500 rose by +12.75 points (+0.30%) to 4,198.50 points. Futures contracts Nasdaq collected +24.75 points (+0.17%) to 14,441.25 points.
In London, the FTSE 100 collected +42.13 points (+0.57%) to 7,369.52 points. In Paris, the CAC 40 increased by +76.51 points (+1.12%) to 6,901.58 points. In Frankfurt, the DAX rose by +94.18 points (+0.64%) to 14,810.72 points.
In Asia, the Nikkei from Tokyo collected +161.89 points (+0.53%) to 30,858.85 points. For his part, the Hang Seng Hong Kong fell -293.88 points (-1.69%) to 17,112.48 points.
On the oil side, the price of a barrel of American WTI increased by +US$0.67 (+0.81%) to US$82.98. The barrel of North Sea Brent rose +US$0.80 (+0.91%) to US$88.25.
The context
The euro zone’s annual inflation rate fell to 2.9% year-on-year in October, a very marked slowdown after standing at 4.3% in September. The figure is better than expected by Factset analysts who expected on average a slowdown of 3%.
Core inflation, adjusted for volatile energy and food prices, also slowed to 4.2%, from 4.5% in September.
These figures reassured investors and caused a relaxation of sovereign interest rates on the bond market. The yield on the ten-year German government bond stood at 2.78% compared to 2.82% at Monday’s close.
Tomas Dvorak, an economist at Oxford Economics, predicts that inflation will “fall below the European Central Bank’s (ECB) 2% target in 2024 and he believes that “the ECB will start cutting rates” as early as April .
However, the euro zone saw its economy contract in the third quarter, GDP fell by 0.1%, a larger decline than expected by the markets.
The euro rose against most other currencies after these figures, by 0.47% against the American dollar ($US) to US$1.0665 per euro.
Across the Atlantic, Wall Street is heading towards a slightly higher opening, while the American central bank (the Fed) begins its monetary policy meeting, which will end on Wednesday.
Furthermore, the Tokyo Stock Exchange ended in the green (+0.53%) and the yen fell (-1.04% to 150.68 yen per dollar) after the decision of the Bank of Japan (BoJ) to ‘to relax its control of the ten-year Japanese bond yield curve, saying it now sees its previous ceiling of 1% as a simple “reference”.
In China, the Shanghai (-0.09%) and Hong Kong (-1.69%) stock exchanges suffered from a contraction in manufacturing activity in China in October, according to official data.
BP disappoints
The British hydrocarbon giant BP announced on Tuesday a result excluding exceptional items, the indicator most followed by the markets, divided by more than two to 3.3 billion, a figure lower than the estimates of analysts surveyed by Bloomberg.
The group also announced a new share buyback program of US$1.5 billion.
Its action fell significantly by 3.74% in London. In its wake, Shell also lost 0.28%.
Among other company results
The chemical giant BASF (+4.16% in Frankfurt) satisfied investors thanks to the cash flow generated in the third quarter, and a reduction in its expenses and investments.
The brewer AB InBev climbed 4.05% in Brussels after reporting a 3% increase in its net profit in the last quarter.
In Paris, the defense and technology group Thales (-2.37%) suffered from a decline in its order intake and Bouygues gained 4.40% after results better than expected by analysts.
Oil rebounds
Oil prices were rising, driven by geopolitical risk in the Middle East as the Israeli army advances in the Gaza Strip, rekindling market fears that the conflict would spread to neighboring countries.
The barrel of North Sea Brent for delivery in December took 0.63%, to US$88.
Its American equivalent, the WTI for delivery the same month, rose 0.60% to US$82.83.
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