2023-08-08 18:40:54
The Milan Stock Exchange fell 2.12%. Paris lost 0.69%, London 0.36% and Frankfurt 1.10%. In Zurich, the SMI lost 0.45%.
Markets are trading in the red on Tuesday, hurt by weaker than expected Chinese economic data and sharp declines in the banking sector.
The Milan Stock Exchange in particular fell 2.12%, its worst session in a month, due to the tumble of its banking stocks after the Italian government’s announcement of a 40% tax on “surplus profits of billion” euros from the banks to offset the cost to households and businesses of soaring interest rates.
Paris lost 0.69%, London 0.36% and Frankfurt 1.10%. In Zurich, the SMI lost 0.45%.
Wall Street opened lower: the Dow Jones yielded 1%, the Nasdaq, with strong technological coloring, 1.53% and the broader S&P 500 index lost 1.11% around 3:55 p.m. GMT.
The publication of a much stronger than expected contraction in China’s exports and imports in July reduced investor confidence in the global economic outlook.
The figures underscored “remaining weak domestic demand and further economic difficulties in the third quarter, according to Michael Hewson of CMC Markets.
This observation was felt on the bond market, where interest rates are falling sharply, a drop to “associate with less good macroeconomic figures”, according to Alexandre Baradez, analyst at IG France.
The yield on the 10-year German government bond stood at 2.47% around 3:55 p.m. GMT, against 2.59% at the close the previous day. French at the same maturity was at 3% against 3.13%. In the United States, the ten-year rate was at 4.01% against 4.09%.
A US central bank official, Patrick Harker, said interest rates could remain stable at the next meeting in September if the economy maintains its trajectory.
The banks toast
Bank stocks fell in Milan. Monte dei Paschi fell by 10.83%, BPER by 10.94%, Intesa Sanpaolo by 8.67%, Banco BPM by 9.09% and Unicredit by 5.94%.
In Frankfurt, Commerzbank lost 3.34%. In Paris, BNP Paribas dropped 3.01% and Crédit Agricole 2.46%, the two French banks being well established in Italy.
In New York, it was a warning from the rating agency Moody’s that troubled investors. It lowered the rating of a dozen small US banks on Monday evening, citing risks associated with their exposure to commercial real estate. Several large banks are also placed under surveillance by the rating agency, including Bank of NY Mellon and State Street.
However, for Alexandre Baradez, an analyst at IG France, the Moody’s report “is not likely to generate a wind of panic on the banking sector”.
On Wall Street, BNY Mellon fell by 2.34%, US Bancorp by 2.47%, Citizen Financial by 3.65% and State Street by 2.69%, and M&T Bank by 3.10% around 3:50 p.m. GMT.
Abrn disappoints
Investment company Abrn slumped 11.67% in London after publishing its half-year results showing lower operating profit and lower capital under management.
Eli Lilly at the party
Eli Lilly’s stock soared 17.06% in New York after the pharmaceutical company raised its annual forecast and posted better-than-expected quarterly earnings.
On the side of oil and bitcoin
Crude prices fell slightly around 3:50 p.m. GMT. A barrel of Brent from the North Sea, for delivery in October, lost 0.26% to 85.15 dollars.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in September, dropped 0.17% to 81.78 dollars.
On the foreign exchange market, the dollar rose 0.36% to 1.0950 dollars for one euro.
Bitcoin was up 1.42% at $29,570.
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