THE EUROPEAN SCHOLARSHIPS DECREASE AT THE BEGINNING OF THE SESSION
by Marc Angrand
PARIS (Reuters) – Major European stock markets retreat on Friday, and Wall Street is expected to follow the same trend, as turmoil over the battle between individual investors and short sellers on Wall Street trumps a string of strong company results and indicators economic degradation less than expected.
In Paris, the CAC 40 lost 1.4% to 5,433.23 points around 08:35 GMT. In London, the FTSE 100 yielded 1.37% and in Frankfurt, the Dax fell by 1.3%.
The EuroStoxx 50 index is down 1.38%, the FTSEurofirst 300 1.4% and the Stoxx 600 1.27%.
The latter has so far shown a decline of 2.5% over the whole week and the CAC 40 a decline of 2.3%, their worst weekly performance since October.
After several sessions marked by the spectacular rise in stocks “defended” against short sales by individual investors united on online forums, several intermediaries, starting with the very popular Robinhood, have limited or stopped trading on some of these. values.
Robinhood said it hopes to be able to lift these restrictions today.
This unprecedented factor only amplifies a risk aversion fueled in recent days by the risk of a shortage of vaccines against COVID-19 in Europe and the prospect of additional restrictions on economic activity.
Bank of America, in its weekly investment flows update, further says it expects a 10% correction in equities in the coming months.
Macroeconomic news is a little more reassuring for the moment: the French gross domestic product (GDP) only contracted by 1.3% in the fourth quarter according to the first estimate of INSEE and household consumption has rebounded 23% in December. German GDP statistics are due at 09:00 GMT.
All sectors are moving in negative territory with the exception of telecommunications, which benefits from the 8.5% increase in Ericsson after the publication of quarterly operating profit almost 30% higher than the Refinitiv consensus, thanks to the deployment of 5G and the ban of its Chinese competitor Huawei from several key markets.
On the downside, the commodities compartment lost 1.53%, that of banks 1.86%, that of financial services 1.43%.
In the news of the results, Daimler gives up 0.71% despite annual higher than market expectations and the optimism displayed by the group for this year.
Among the rare increases in the large Parisian SBF 120 index, JCDecaux gained 2.11% despite the announcement of a 40.6% drop in its annual turnover.
On the Tokyo Stock Exchange, the Nikkei index ended down 1.89% as profit taking and end-of-month position adjustments weighed on the trend after a higher opening driven by tech stocks.
Over the week, the Japanese market posted a drop of 3.38%, its worst weekly performance since July. It nevertheless gained 0.8% over the month of January as a whole.
In China, the Shanghai SSE Composite fell 0.63% and the CSI 300 0.47%. Chinese investors are worried among other things about the rise in short-term money market rates, which raises fears of tensions on liquidity orchestrated by Beijing to slow the rise in equities. The People’s Bank of China, however, denied having raised the rate on its loan facility.
A WALL STREET
Futures contracts on the main US indices for the moment foreshadow a drop of around 1% for the Dow Jones as for the Standard & Poor’s 500 and of nearly 1.5% for the Nasdaq
On Thursday, the New York Stock Exchange benefited from a semblance of calm in the battle between retail investors and short sellers, the absence of bad surprises in today’s US indicators and a start to the earnings season companies found encouraging.
The Dow Jones gained 300.19 points (+ 0.99%) to 30,603.36, the S & P-500 gained 36.61 points, or 0.98%, to 3,787.38 and the Nasdaq Composite advanced 66 , 56 points (+ 0.50%) to 13,337.16 points.
Microsoft (+ 2.6%) and Alphabet (+ 1.9%) were among the main contributors to Wall Street’s rebound on Thursday.
On the downside, GameStop fell 44% as the value of the video game distributor, at the heart of the clash between hedge funds and individual investors, had increased tenfold in one week.
Benchmark yields in the euro zone are up slightly, at -0.533% for the ten-year German Bund and -0.2827% for the French OAT of the same maturity.
The ten-year American continues to benefit from risk aversion and its return is 1.0536%.
The dollar, another beneficiary of the decline in safe-haven securities, appreciated by 0.29% against a benchmark basket made up of several other currencies including the euro, which fell to 1.2102.
The oil market is down slightly in limited volumes for this last January session.
Brent drops 0.04% to $ 55.51 per barrel and US light crude (West Texas Intermediate, WTI) 0.4% to $ 52.13.
(edited by Patrick Vignal)