2023-09-27 12:49:33
(Photo: The Canadian Press)
MARKET REVIEWS. Stock markets attempt a slight rebound on Wednesday after several sessions of decline recorded due to the rise in interest rates to the highest levels in several years.
Stock market indices at 7:30 a.m.
Paris, London and Frankfurt barely fluctuated at the start of the session in Europe, adding or losing 0.1%.
In New York, before the markets opened, the average Dow Jones industrial stocks rose by 0.3% and the broader index S&P 500 of 0.4%.
In Asia, the Nikkei 225 added 0.3% in Tokyo. The scholarship of Shanghai added 0.2% and the Hang Seng 0.7% in Hong Kong. Sydney lost 0.3% and Seoul 0,1%.
On the New York Commodity Exchange, the price of oil rose 98 US cents to US$91.37 per barrel.
The context
“This increase comes from the wrong reasons, because it is the reduction in supply and not the improvement in demand which is driving this movement,” comments Xavier Chapard, member of the research and strategy team at Banque Postale AM.
“We are still far from the energy shock of 2022,” emphasizes Xavier Chapard, “but if the rise in oil prices continues, energy inflation will again contribute slightly positively to inflation in 2024,” he continues.
Thus, “for central banks, the rise in the price of oil complicates the situation, even if as it stands we still think that the Fed and the ECB should give themselves time and keep their rates unchanged by the end of the year,” the analyst further estimates.
“I believe that we are close or very close to the high point of interest rates”, the main instrument to fight against inflation, declared Wednesday the governor of the Bank of France François Villeroy de Galhau during an interview on BFM Business.
On the bond market, the interest rate on the German 10-year bond rose to 2.62%, compared to 2.61% the day before.
Rates, Barratt’s fallers
British real estate builder Barratt Developments lost nearly 2% on the London Stock Exchange on Wednesday after announcing that the rise in mortgage rates is weighing on the borrowing capacity of British households and on its annual results.
The IT security company Darktrace fell by almost 4%, despite the publication of a sharp increase in net profit for its full financial year ended at the end of June, investors being cooled by lackluster prospects for the current financial year.
Barry Callebaut launches major savings program
The Swiss cocoa and chocolate supplier Barry Callebaut (+0.13% in Zurich) announced on Wednesday a reorganization of its activities, accompanied by a major savings program, under the aegis of its new general director, appointed in April to improve group performance.
On the currency side
The US dollar stabilized against the euro after gains the day before. The euro gained 0.08% to US$1.073 around 9:55 a.m. GMT.
The British pound lost a little ground against the euro and the American dollar, without much conviction, before a speech by the governor of the Bank of England (BoE) Andrew Bailey, when the Canadian dollar weakened before a meeting of the central bank of Canada.
In detail, the British currency lost 0.10% against the US dollar, to US$1.2552 per pound, and fell by 0.18% against the euro to 85.49 pence per euro.
Bitcoin gained 0.16% to US$25,748.
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German consumer morale is expected to continue its decline in October, weighed down by precautionary savings, the highest in 12 years, in an economy still struggling, according to the GfK barometer.
“The chances of a recovery in consumer confidence this year have probably fallen to zero,” commented GfK consumer expert Rolf Bürkl.
The prospect of high interest rates for a long time, a scenario mentioned by central banks last week, has pushed up interest rates on the bond market, and, in turn, caused a decline in the stock markets.
The yield on 10-year US government bonds reached 4.56%, a first in almost 16 years, and the 30-year yield rose to 4.69%, a peak in more than 11 years.
The interest rates on French and German 10-year debt have also set new records for more than ten years. The 10-year German government yield stood at 2.78%, and that of the United States at the same maturity at 4.51%, down slightly compared to the day before.
In addition, investors are monitoring the risk of a “shutdown” in the United States; all funding for federal services could in fact be suddenly cut after the September 30 deadline, if no budget agreement is found in Congress.
The US Senate drafted a last-minute short-term budget proposal on Tuesday, although it is unlikely to be approved by the House of Representatives.
On s’arrache H&M
The Swedish clothing giant H&M (+3.25% in Stockholm) multiplied its net profit sixfold in the third quarter, thanks to its savings program. A provision linked to Russia which weighed down its results last year.
In its wake, Asos also took 1.31% in London, Inditex (Zara parent company) 0.49% in Madrid.
Equinor and Ithaca in Scotland
The Norwegian energy company Equinor (+1.56% in Oslo) and its counterpart Ithaca (+9.44% in London), subsidiary of the Israeli Delekwill jointly exploit a controversial oil field in the north of Scotland, which the British oil and gas regulator has just authorized.
The two companies announced an investment of 3.8 billion US dollars (US) in this project.
BMPS on the market
The financial information agency Bloomberg reports, according to sources familiar with the matter, that the Italian state is considering selling 15% of the bank’s capital Monte dei Paschi di Siena. A merger with another Italian banking establishment would also be on the table, in order to counter the duopoly of Intesa Sanpaolo and UniCredit.
In Milan, BMPS fell by 7.03%, BPER by 3.15%, Banco BPM by 3.13%, Intesa Sanpaolo by 0.62% and UniCredit by 0.38%.
Oil rises, gas falls
Oil prices are rising again, in a context of tightening supply taking over the surge in the dollar and fears about the state of the global economy.
The barrel of North Sea Brent for delivery in November, took 1.46% to US$95.33 and a barrel of West Texas Intermediate (WTI) of the same maturity, gained 1.63% to 91.86 dollars.
On the natural gas side, the Dutch TTFs, considered the European benchmark, fell by 2.34% to 39.38 euros per megawatt hour (MWh).
The euro fell further by 0.32% against the US dollar, which is at its highest levels since March against the single European currency, at US$1.0538 per euro.
The bitcoin rose 2.46% to US$26,790.
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