(New York) Financial markets turned on the defensive on Tuesday, blaming the blow of the publication of a record inflation indicator in the United States on the eve of a Federal Reserve decision, still amid uncertainties sanitary facilities.
After opening higher, the Euro Stoxx 600 lost 0.92%. Paris (-0.69%) and Frankfurt (-1.08%) fell sharply, while London (-0.18%) and Milan (+ 0.17%) held up better, supported by stocks linked to commodities and the bank.
The Dow Jones finished down 0.30%, the NASDAQ technology-rich index 1.14%, and the broad S&P 500 index 0.75%.
In Asia, the financial centers finished in the red, in China as in Tokyo (-0.73%).
Like Wall Street, European markets reacted badly to the publication of the monthly producer price indicator in the United States, which turned out to be higher than analysts’ expectations, with an increase of 9.6% on a year.
Caution is required among investors, who are awaiting the outcome of the meetings of the Fed, the ECB or the Bank of England on Wednesday and Thursday.
Faced with inflation, which has reached levels not seen for decades in the United States and Europe, monetary institutions are forced to revise their support policies.
The economic recovery well underway has allowed the US Federal Reserve to begin to slow down the pace of its asset buybacks. Analysts expect the central bank to announce a more pronounced slowdown on Wednesday.
“We are in a fairly crucial week on central banks”, underlined Vincent Manuel, director of investments at Indosuez Wealth Management, “and all this is being done in a context where volatility is on the rise” with the strengthening of health restrictions in many countries in the face of the unknown Omicron variant of COVID-19.
If the first data indicating less danger reassured the markets last week, the increased spread worries investors.
In addition, it seems to be able to bypass the defenses of vaccines: that of the American laboratory Pfizer is generally less effective, but protects 70% against severe cases, according to a study carried out in South Africa.
“The question this week is whether central banks perceive inflation or Omicron as the greatest risk,” summarizes Craig Erlam, analyst for Oanda.
BT does not respond
British incumbent BT lost 4.29% to 167.35 pence. Billionaire Patrick Drahi announced to increase his stake from 12.1% to 18% in the operator, of which he was already the largest shareholder, but confirmed his intention not to launch a takeover bid.
Rentokil buys a rival
The British giant Rentokil Initial (-12.3% to 547.60 pence), specializing in particular in pest control and hygiene services, will buy its American rival Terminix for 6.7 billion dollars.
Tech at half mast, banks profit
In a context of rising bond rates, bank stocks were sought after, like Societe Generale (+0.99% to 28.93 euros) and Crédit Agricole (+ 0.87% to 12.23 euros) in Paris, or HSBC (+ 0.79% to 434.70 pence) in London.
Conversely, technology stocks fell, weighing in particular on the Dax index in Frankfurt: Infineon lost 3.27% to 38.70 euros and the software giant SAP 2.07% to 119.96 euros.
Mining rebounds
Mining stocks allowed European indices not to increase their losses. In Paris, ArcelorMittal jumped 8.05% to 27.72 euros after the announcement of a repurchase of subordinated debt. In London, BHP took 1.98% to 2,168.00 pence, Anglo-American 1.03% to 2,898.00 pence.
On the oil, euro and bitcoin side
Oil prices ended lower on Tuesday after the publication of new estimates by the International Energy Agency (IEA), which expects less demand due to the spread of the Omicron variant of the coronavirus.
A barrel of North Sea Brent for February delivery, the most traded in London, closed down 0.92% at $ 73.70.
In New York, a barrel of West Texas Intermediate (WTI) maturing in January ended at $ 70.73, 0.78% less than the day before.
The euro dropped 0.24% against the greenback at 1.1256 dollars.
Bitcoin gained 3.36% to 48,406 euros.