(Paris) The decline in oil prices and the resumption of talks between Russian and Ukrainian officials supported European stock markets on Monday morning, but Chinese markets suffered from the pressure exerted by Beijing on technology companies and the confinement in the city of Shenzhen .
Posted at 6:56 a.m.
Divergence on Monday in Asian markets, where Tokyo recovered (+0.58%) after the new heavy losses last week, but where Chinese markets ended down, weighed down by concerns about the recovery. by Beijing of the technological sector and by the containment of the large city of Shenzhen, the technological center of the country.
On the Hong Kong Stock Exchange, the Hang Seng technology index closed on a fall of 4.97%, falling during the session below 20,000 points for the first time since mid-2016. The Shanghai Stock Exchange fell 2.6%.
On the other hand, the European markets continued Monday morning their rebound started on Friday: Paris rose by 0.72%, Frankfurt by 1.93% and Milan by 1.04%. London was hovering around equilibrium.
In Ukraine, the fighting continues to rage, but a new round of talks between Kyiv and Moscow is scheduled for Monday and both sides have reported progress at the diplomatic level.
Still on the diplomatic side, senior American and Chinese officials are to meet in Rome on Monday, according to the White House, which is concerned about possible assistance from Beijing to Moscow.
Enough for investors who “cling to any good news”, underlines Neil Wilson, analyst of markets.com.
Oil ebb
Oil prices offered some respite for investors on Monday, after hitting highs last week following the US embargo on Russian hydrocarbons due to Russia’s invasion of Ukraine. But prices, which remain high, continue to fuel inflation.
“The fall in oil this (Monday) morning could also be partly due to expectations that China’s domestic consumption could temporarily fall” due to the drastic health measures that are penalizing the economy, said Jeffrey Halley, analyst at Oanda.
The price of a barrel of American WTI fell by 3.04%, to 105.98 dollars, and that of a barrel of Brent from the North Sea lost 2.42%, to 109.92 dollars.
Moreover, the negotiations which seemed on the point of reaching a conclusion on the Iranian nuclear issue are now at a standstill. The discussions underway in Vienna with Iran aim to bring Washington back to the 2015 nuclear agreement, in particular by lifting sanctions against Iran which, among other things, severely limit its participation in the oil market.
In this context of soaring prices, the American central bank (Fed) will not be able to sit idly by and will have to take into account the fact that the economy bears higher costs linked to the rise in raw materials. Investors expect it to raise its key rates by 0.25 percentage points after its meeting on Tuesday and Wednesday.
This monetary policy meeting “will clearly be the highlight of the week in terms of economic data, even if the short-term financial markets continue to be wary of developments in Ukraine,” Halley said.
“Market attention will also turn to the likelihood of a default by Russia whose economy is hit by sanctions” taken by the West, notes Michael Hewson, analyst at CMC Markets.
The Russian Finance Ministry said on Monday that the sanctions against Moscow because of the conflict in Ukraine were aimed at causing an “artificial” default by Russia.
Apple supplier Foxconn suspends operations in Shenzhen
Taiwanese electronics giant Foxconn, Apple’s main supplier, announced on Monday that it was suspending its activities in the Chinese technology center of Shenzhen, confined by the government due to an epidemic wave.
Falling oil and mining values
In London, mining companies Rio Tinto and Glencore fell by 3.97% and 3.78% respectively. In the oil sector, Shell dropped 1.52% to 1933.80 pence and BP 1.19% to 356.10 pence. Technip Energies sold 1.19% at 9.66 euros and Vallourec 2.59% at 10.52 euros in Paris, around 4:50 a.m. EDT.
On the side of the euro and bitcoin
The euro was trading for $1.0958, up 0.30% from Friday’s close.
Bitcoin was trading at $39,087, up 1.04% from Friday’s close.