Stocks fall despite pause in rising yields

EUROPEAN SCHOLARSHIPS OPEN IN FALL

PARIS (Reuters) – Major European stock markets retreat at the start of Friday’s session, as the pause in the upward movement in bond yields was not enough to allay concerns and doubts about valuations after the sharp declines suffered by Wall Street and by the main Asian places.

In Paris, the CAC 40 lost 0.47% to 5,756.78 points at 08:55 GMT after having returned to the first exchanges below 5,700 for the first time in two weeks. In London, the FTSE 100 lost 0.35% and in Frankfurt, the Dax fell 0.18%.

The EuroStoxx 50 index is down 0.42%, the FTSEurofirst 300 0.59% and the Stoxx 600 0.44%.

The rise in yields on government bonds accelerated Thursday in Europe and especially in the United States, where that of ten-year Treasury bills briefly exceeded 1.6%, the highest since the start of the crisis. coronavirus and above the yield served by the dividends of the Standard & Poor’s 500 index, a benchmark for many investors.

This movement, which the declarations of central banks on the absence of lasting inflationary risk no longer seem sufficient to halt in the long term, calls into question the valuations of equities, starting with those of the high technology sector, the engine of the increase in recent months. .

The US Nasdaq lost 5.44% in the first four sessions of the week and is heading for its worst weekly performance since last March.

A sign that the tension is gradually gaining all the markets, the Australian central bank has launched a bond buyback operation to try to slow the rise in yields.

“It seems traders and investors are not listening to those responsible for monetary policy and are obsessed with the idea that interest rates will rise sooner than expected,” summarizes Naeem Aslam, head of analysis market at AvaTrade.

For his part, Sebastian Paris Horvitz, strategist of LBPAM, evokes a “revolt” of the bond markets in the face of the prospects of economic recovery, the rise in inflation and “an extremely abundant supply of paper given the considerable public deficits in finance”.

VALUES

The most marked sectoral declines at the start of the session were for commodities, for which the Stoxx index lost 1.81%, energy (-1.44%) and technology (-1.05%).

Within the CAC 40, ArcelorMittal dropped 2.42%, Total 1.51% and STMicroelectronics 0.71%.

Unibail-Rodamco-Westfield and Klépierre respectively yield 2.45% and 1.99% after the mention of a tightening of confinement in Paris.

At the top of the Parisian index, Téléperformance gained 7.26% and Saint-Gobain 3.5% after the publication of their respective annual results.

Among the best performances of the Stoxx 600, IAG won 4.38% despite an annual loss of 4.37 billion euros, the group having assured that it would not need to refinance.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index fell 3.99%, its worst performance since April 1, the decline affecting all sectors but particularly technology stocks: Advantest lost 7.51%, Screen Holdings 6.53 %.

The Japanese market fell 3.5% over the week as a whole but rose 4.71% in February.

In China, the Shanghai SSE Composite ended the day down 2.12% and the CSI 300 fell 2.43% while in Hong Kong the Hang Seng fell 3.29%.

A WALL STREET

Futures contracts on the main US indices, which suggested a further decline in daily flow, now foreshadow a beginning of a rebound, but in proportions not commensurate with Thursday’s fall.

The Nasdaq Composite indeed fell by 478.54 points (-3.52%) to 13,119.43, its worst performance since October, while the Dow Jones lost 559.85 points (-1.75%) to 31,402, 01 and that the S & P-500 lost 96.09 points, or 2.45%, to 3,829.34.

Among the heavyweights of high technology, Apple has yielded 3.48%, Intel 4.41% and Microsoft 2.37%. And Tesla, fell 8.1% after press reports on the suspension of production of the Model 3 at its plant in California.

RATE

The rise in eurozone yields is pausing in the wake of the US decline: that of the ten-year German Bund has fallen by nearly five basis points to -0.273% and its French equivalent has turned negative again. However, they remain sharply higher over the week.

The ten-year-old American returns to 1.4598% after reaching Thursday, at 1.614%, its highest level since mid-February 2020, before the outbreak of the coronavirus crisis.

Its rise accelerated after the disappointing results of a seven-year Treasury auction, the ratio between demand and supply of bonds, falling to 2.04, its lowest level for this maturity, according to the broker. specialized DRW Trading.

CHANGES

The dollar rallied against other major currencies (+ 0.24%) after falling to its lowest level since January 8 on Thursday.

The euro is back around 1.2150 dollars (-0.23%) against a peak at 1.2242 the day before and the decline is even more marked for the pound sterling, which gives up more than 0.4% against the greenback .

OIL

The oil market is suffering both from the appreciation of the dollar and speculation about a possible increase in supply after the 13-month highs reached this week by the price of the barrel.

Brent dropped 0.85% to $ 66.31 per barrel and US light crude (West Texas Intermediate, WTI) 0.91% to $ 62.95.

(Marc Angrand)

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