Frankfurt takes off by 7.92% and Milan by 6.94%, signing their strongest daily increase since March 2020. Paris climbs by 7.13% and London recovers by 2.79%. In Zurich, the SMI rose by 3.95%.
Western stock markets rose sharply on Wednesday, after several sessions of sharp decline which led investors to take advantage of cheap purchases, despite still very strong fears about the economic consequences of the Russian-Ukrainian conflict.
Frankfurt’s flagship index, the Dax, rose 7.92%. In Paris, the CAC 40 rose by 7.13% and in Milan, the FTSE MIB gained 6.94%. For Frankfurt and Milan, this is the largest daily increase since March 2020. London took 2.79%. In Zurich, the SMI rebounded by 3.95%.
In New York, the three main indices also rose: around 5:05 p.m. GMT, the Dow Jones took 2.14%, the S&P 500 2.54% and the Nasdaq climbed 3.14%.
“The time has come for bargain hunters” to take advantage of the fall of the previous days, notes Timo Emden, independent analyst.
CMC Markets analyst Michael Hewson said the rebound was also “helped by comments from the Russian Foreign Ministry, which said it would be better if their goals in Ukraine were achieved through talks.”
But the experts temper the rise of the day, “the geopolitical situation changes every second”, recalls Andreas Lipkow, for Comdirect.
“This is most likely a dead cat bounce,” Oanda analyst Craig Erlam told AFP. This market term refers to a rebound that briefly interrupts a prolonged downturn.
“The invasion is still ongoing, sanctions are still being imposed and oil prices are still high,” he said. “None of this is conducive to a sustained stock market recovery,” he said.
Ukraine is still facing a Russian offensive, on the eve of discussions between the head of Russian diplomacy and his Ukrainian counterpart in Turkey.
The sanctions imposed on Russia are also pushing the country to the brink of default, while many international companies have already decided to cut off their trade relations with the country.
Last shock measure to date: an American and British embargo on Russian hydrocarbons, which raises fears of a new surge in energy prices.
The economic consequences of this conflict continue to cause concern, and in particular the risk that the recovery of post-pandemic activity will be replaced by a period of stagflation: a slowdown in growth combined with persistent inflation, currently fueled by soaring prices raw materials, oil in the lead.
Trend reversal on all fronts
This Wednesday, however, everything was moving in the opposite direction to previous days: stocks and the euro rose, while oil and safe havens, such as gold, fell, “fairly consistent movements in a day of recovery”, according to Clémence de Rothiacob, manager at Richelieu Gestion.
Oil prices fell sharply as investors ignored dwindling US crude reserves to focus on the war in Ukraine and the diminished prospect of a European embargo on Russian crude.
Around 5:05 p.m. GMT (6:05 p.m. in Paris), the barrel of Brent from the North Sea lost 6.41% to 119.81 dollars and that of West Texas Intermediate (WTI), the American reference, fell by 5.46% to 116, $95.
Gold fell 2.42% to just $2,000 an ounce. Another popular asset during periods of crisis, sovereign bonds were somewhat neglected. Yields rose, to 1.92% for example for 10-year US debt.
The euro rebounded 1.54% against the greenback at 1.1068 dollars.
Bitcoin rose 9.87% to $42,300 after US President Joe Biden launched work on a future “digital dollar” on Wednesday.
As for equities, banks, which have fallen sharply since the start of the crisis, took advantage of the rebound on Wednesday.
After having lost half of its value, the action of the Austrian Raiffeisen rose by 17.32%. Societe Generale climbed 11.53% Commerzbank 11.17% and Unicredit 11.68%. In New York Wells, Fargo took 5.85% around 5:05 p.m. GMT.
Airlines experienced rebounds of the same magnitude in Europe: Easyjet +12.57%, IAG +11.03% and Lufthansa 12.02%.
Conversely, the values of the armament gave up a small part of their gains of the previous days. Thales lost 4.24%, and Hensoldt 5.06%. BAE Systems (-4.22%) finished at the bottom of the London rating.