(Paris) European stock markets fell sharply on Thursday, still worried about the repercussions of the Russian-Ukrainian conflict and awaiting the reaction of the European Central Bank to the war in Ukraine.
Posted at 8:14 a.m.
Around 7:15 a.m., the Frankfurt Stock Exchange fell by 3.02% and that of Milan by 3.19%. Paris also fell by more than 2.5% and London lost 1.11%.
The day before, Western stock markets had experienced a strong rebound with rates of change exceeding 7% in Europe. Thursday morning, the Asian stock markets have also caught up with this rebound.
A breath of fresh air in the order of a “technical rebound”, after several sessions of sharp decline, even if the possible abandonment of a request for NATO membership on the part of Ukraine and the fall in oil , despite a US embargo on Russian hydrocarbons, supported this trend.
In New York, the three main indices were preparing to open lower, according to their futures contracts which lost -0.91% for the Dow Jones, -0.85% for the S&P 500 and -1.22% for the NASDAQ.
On Thursday, the Ukrainian and Russian foreign ministers met for the first time since the start of the invasion in Turkey for talks which began around 8:30 GMT.
In addition to news on the Ukrainian front, investors will be watching closely the European Central Bank (ECB) monetary policy meeting, the first since the start of the conflict.
In this context, ECB President Christine Lagarde will have to find the words to explain that the central bank wants to remain flexible, while reaffirming its desire to fight inflation, while the American and British central banks are showing much more determination. .
The ECB had paved the way in February for a “normalization” of its policy after two years of massive support for the economy in the face of the COVID-19 pandemic. Analysts were counting on a possible increase, at the end of the year, of key rates, which are still historically low.
But with a war on the doorstep of Europe and the sanctions taken against Russia, the risk of “stagflation”, a dreaded combination of inflation and economic stagnation, has “clearly increased”, observes Carsten Brzeski, economist at ING.
The publication of the consumer price index for February in the United States is also on the agenda. For Ipek Ozkardeskaya, analyst at SwissQuote, a “bad surprise” cannot be excluded “given the current circumstances”.
“The question is to what extent the rise in inflation could modify the expectations of the Federal Reserve (Fed)”, adds the analyst.
Oil is on the rise again
The recent surge in commodity prices will certainly weigh on inflation according to analysts, starting with the rise in energy prices.
Around 6:45 a.m., a barrel of Brent from the North Sea gained 4.85% to 116.53 dollars and that of West Texas Intermediate (WTI), the American benchmark, rose 4.14% to 113.20 dollars. Still far from their Monday peaks.
European natural gas fell 7.30% to 144.5 euros per megawatt hour (MWh), after a record close to 350 euros per MWh on Monday.
After the yo-yos of the previous days, the sectors most exposed to Russia experienced less spectacular variations.
Moreover, the sanctions imposed on the Russian oligarchs continued to upset the markets. The share of Russian steel giant Evraz, of which Roman Abramovich is the main shareholder and which has just been the subject of an asset freeze by the British government, plunged nearly 10.65% to 82.68 pence in London around 5.40 a.m. It has lost 76% of its value since the start of the year.
On the side of the euro and bitcoin
The euro fell 0.28% against the greenback at 1.1045 dollars.
The bitcoin (-6.58% to 39,140 dollars) gave up a large part of its gains the day before acquired after the launch of the construction site of a “digital dollar”.