© Reuters. THE EUROPEAN STOCK MARKETS FALLING AT MID-SESSION
by Patrick Vignal
PARIS (Reuters) – europe’s main stock Exchanges are evolving into lower Wednesday at mid-session and Wall Street is expected to the imitate, the geopolitical concerns related to the conflict in syria in addition to the continuing concerns regarding the trade tensions between the United States and China.
Caution in equity markets can be explained also by the imminence of the publication of the monthly figures for inflation in the United States and of the minutes of the last meeting of federal Reserve’s monetary.
In Paris, the CAC 40 lost 0.41% at 5.285,85 points to 10.40 am GMT. In Frankfurt, the Dax yield 0,52% and in London, the FTSE is down 0.15 per cent.
Index pan-european FTSEurofirst 300 gives up 0.47 per cent, the EuroStoxx 50 euro-zone 0.38% and the Stoxx europe 600 index grew by 0.42%.
Futures contracts on indices of New York stock Exchange indicate an opening down 0.7% to 0.8%, while the index measuring the implied volatility of the S&P 500, nicknamed “the fear index” on Wall Street, is once again facing upward.
The tone conciliatory chosen by Xi Jinping to the speech he gave Tuesday at the Forum for Asia in Boao has been enough to restore investor confidence, but they are now waiting for new concrete and, in the meantime, turn to other concerns, geopolitical or macroeconomic.
The evolution of the situation in Syria led to the caution, since the declarations of the western countries, United States, France and Great Britain in the lead, suggest that air strikes targeting the regime in Damascus could take place in the next few days after the alleged attack with chemical weapons Saturday to the state Duma, in spite of the opposition of Russia, which supports Bashar al-Assad and present militarily on the ground in syria.
This surge of tension in the Middle East, contributing to rising oil prices: the price of a barrel of Brent reached its highest level since the end of 2014 to 71,44 dollars. The light crude to u.s. West Texas Intermediate, WTI) is trading always close to 66 dollars, about 1% to its highest of the year.
In emerging markets, the Russian ruble lost more than 2% against the us dollar and the Turkish lira touched a new record low.
Gold, a safe haven par excellence, takes on 0,52% – to more than 1.354 dollars per ounce.
TESCO AND DEUTSCHE TELEKOM SURROUNDED
Meanwhile, markets await the monthly figures of consumer prices in the United States at 12: 30 GMT and then at 18.00 GMT, the minutes of the last meeting of the Fed, two factors that are likely to reignite the debate on the possibility of a fourth interest rate hike this year, in addition to the three originally planned by the central bank.
On the foreign exchange market, the dollar declined slightly against other major currencies and the euro rose slightly, around 1,238 dollar, the highest since two weeks.
Bond yields are changing a little, but the inflation figures in the United States and signals the Fed could change the game.
The values in Europe, many sectors remain sheltered from the downturn in general, beginning with that of the distribution (+0,69%), boosted by the increase of 6,18% of the british Tesco (LON:TSCO) after its annual results better than expected.
The compartment of the telecommunications (+0,22%) also draws its pin from the play, worn by the bond 3.14% Deutsche Telekom (DE:DTEGn). The German group benefits from the information on the resumption of talks between its us subsidiary, T-Mobile US (NASDAQ:TMUS) and Sprint to merge.
In contrast, the sub-fund agri-food transfers 1,02%, with the decline of 2.54% of Rémy Cointreau (PA:RCOP), penalized by the lowering of the recommendation from JPMorgan (NYSE:JPM) to “neutral”, analysts of the american bank taking the view that the positive momentum on earnings estimates for the group of spirits is slowing.
(Edited by Marc Angrand)