Market Reviews: World Stock Markets Fall on Inflation Concerns and Pressure on Raw Materials

2023-09-13 14:04:05

(Photo: The Canadian Press)

MARKET REVIEWS. World stock markets fell on Wednesday, preparing for the announcement of an acceleration in inflation in the United States in August, while the pressure on raw materials has further strengthened since then.

Stock market indices at 7:30 a.m.

Europe was in a clear decline: Paris yielded 0.67%, Frankfurt 0,75%, London 0,34% et Milan 0,78% vers 07 h 50.

HAS New Yorkthe futures contracts of the three main indices predicted a slightly lower opening.

Caution also prevailed in Asia, where the Stock Exchange Tokyo ended with a slight decline of 0.21%, Hong Kong of 0.09% and Shanghai of 0.45%.

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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“Market participants continue to act defensively ahead of tomorrow’s (Thursday) ECB meeting, avoiding taking risks,” observes independent analyst Andreas Lipkow.

Investors are preparing for US inflation data, with the CPI indicator, published at 8:30 a.m. The price increase in August “should be the largest since June 2022”, in particular due to the impact of the rise in gasoline prices, warn analysts at Deutsche Bank.

THE oil price continue to climb, after reaching their highest level in session since November on Tuesday: the baril de Brent de more you Nord rose another 0.60% to 92.61 US dollars ($US), and that of American WTI by 0.62% to US$89.39 around 7:40 a.m.

The Organization of the Petroleum Exporting Countries (OPEC) warned on Tuesday that it expected a shortfall in supply compared to global demand in the fourth quarter not observed since 2007.

Over one year, US inflation is expected at 3.6%, compared to 3.2% in July.

Among other indicators published during the session, British gross domestic product (GDP) contracted by 0.5% in July, suffering from strikes in health and education and rainy weather which adversely affected to retail.

On Thursday, investors will listen carefully to the conclusions of the European Central Bank’s monetary policy meeting, where the dynamics of inflation will also be the central element.

BP CEO resigns

The British oil and gas giant BP (BP, -1,13%) announced Tuesday the resignation “with immediate effect” of its general manager Bernard Looney, accused of having hidden “personal relationships” with several colleagues within the group. Other oil stocks were up, as TotalEnergies (TTE, +0,05%), Shell (SHEL, +0,04%) or Eni (E, +0.20%).

The shipowner MSC embarks in Hamburg

The action of the Port of Hamburg (HHLA) jumped more than 55% after the submission by the giant Swiss shipowner MSC of a takeover offer at a rate of 16.75 euros per share, which values ​​the target at nearly 1.2 billion euros. It is stipulated that the city of Hamburg will ultimately own 50.1% of the company and MSC 49.9%, according to the terms of the offer.

Chinese car manufacturers in the EU’s sights

The President of the European Commission Ursula von der Leyen announced on Wednesday the opening of an investigation into Chinese public subsidies for electric automobiles to defend the European industry in the face of “artificially low prices”.

Renault (+1.71%) and Volvo Car (+1.30%) rose significantly, but most European players were down slightly.

The sought-after dollar

The American dollar strengthened before the publication of American inflation: it gained 0.16% against the euro, to US$1.0737 per euro around 7:50 a.m., 0.13% against the pound, at 1.113 5 pounds per US dollar, but also 0.19% against the yen, at 147.36 yen per US dollar.

The bitcoin took 0.40% to US$26,180.

On the bond market, the interest rates of European states rose to reach 3.22% in France and 2.67% in Germany on the 10-year maturity.

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