(Paris) European markets were up sharply on Monday, benefiting greatly from a drop in interest rates and dismissing tensions without batting an eyelid from China, where the reappointment of President Xi caused the Hong Kong Stock Exchange to unscrew.
Posted at 8:01 a.m.
The European markets began a week rich in news clearly in the green: Paris rose by 1.82%, Frankfurt by 1.60%, Milan by 1.73% and London, further down, by 0.49% around 7 a.m. 35.
They were not disturbed by the fall of the Hong Kong Stock Exchange, which fell by 6.36% to find its lowest level since the financial crisis of 2009. Investors are particularly worried about the decision of the Chinese president Xi Jinping to entrust key economic positions to his allies who support the “zero COVID-19” policy, held responsible for the sharp drop in growth in the world’s second largest economy.
Mainland Chinese stock exchanges like Shanghai and Shenzhen lost just over 2%.
After a strong advance on Friday, Wall Street was heading for a slightly higher open, with gains between 0.4% and 0.7% according to the futures of the three main indices.
The news of the week will be extremely busy for the markets, between the peak of corporate publications in Europe and the United States, as well as the meeting of the European Central Bank on Thursday, before that of the American Central Bank at the start next week.
The hope that the Fed is initiating, at least in its speech, the hypothesis of a change of gear after the numerous and painful hikes in its main key rate this year, in order to bring inflation back under control, supported equities. .
It also pushed state interest rates down a bit after their peak on Friday. Thus, the cost of the 10-year loan for Germany relaxed to return to 2.29%, against 2.52% at its highest on Friday.
“The mere suggestion of a Fed rate hike of 50 basis points in December” rather than 75 basis points – a hike that is considered committed for the next meeting in early November – “triggered a strong rally in equities Americans” as well as “a partial reversal of the recent surge in the cost of US government borrowing”, summarizes Ray Attrill of the National Australia Bank.
Galp Energia disappoints
The Portuguese oil and gas group Galp Energia lost 3.72% after announcing a net profit below expectations.
Before many other results in this sector this week, TotalEnergies fell by 0.25%, Shell by 1.37%, but Repsol took 0.23% and Eni 0.86%.
Chinese technology sees red
Many Chinese behemoths collapsed on Monday with Xi’s reappointment as head of China, such as Alibaba (-11.42%), Tencent (-11.43%) and Xiaomi (-8.65%). In Europe, the Prosus fund (-13.33%) suffered due to its exposure to these stocks.
These behemoths have been hit in recent years by Xi’s crackdown on the sector, which has squeezed profits and lost billions of dollars in market valuation.
On the side of currencies and commodities
The euro fell 0.40% to 0.9822 dollars around 7:30 a.m., after having grazed 0.99 dollars, the highest since October 6. The pound fell 0.05% to $1.1296.
Bitcoin fell 0.49% to $19,400.
Oil was down a little, while China’s exports slowed in September, after growth in the 3e quarter better than expected. A barrel of Brent from the North Sea for December delivery was worth 92.64 dollars (-0.92%) around 7:20 a.m. and that of WTI at the same maturity 83.91 dollars (-1.35%).
European natural gas continued to fall, below 100 euros (98.15 euros; -13.58%), the lowest since mid-June. This is due to “warm autumn weather across Europe and high storage levels ahead of the onset of winter”, according to analysts at Energi Danmark.