(Paris) Global stock markets rose strongly on Tuesday, after hitting their lowest level of the year at the end of September, as investors again expected more leniency from central banks in the face of deteriorating economic activity.
Posted at 7:18 a.m.
The European stock markets soared after two sessions of sharp rise: Paris jumped 3.54%, Milan 2.75%, Frankfurt 3.12% and London 2.10% around 6:45 a.m.
In Asia, Tokyo jumped 2.96%. Chinese stock exchanges remained closed due to a public holiday.
On Monday, Wall Street had recovered more than 2% after hitting its lows for the year at the end of last week. US markets were heading higher again at the open, with futures rising between 1.6% and 2.3%.
“The American data showed the first signs of success of the cycle of tightening of the American Central Bank” which wants to restrict the activity to fight against inflation, notes Stephen Innes, manager at Spi AM. “They may suggest that the monetary committee may not need to continue the path of steep policy rate hikes.”
The Reserve Bank of Australia raised interest rates by 0.25 basis points on Tuesday, but less than expected, on concerns about a slowing global economy.
The monetary institution stressed in a press release that it had already raised its rates “substantially in a short time”, to bring them to their highest in nine years, at 2.6%.
Since the publication of poor indicators of manufacturing activity in the United States on Monday, investors are betting that the American Central Bank will follow the movement of its Australian counterpart.
This surge in the markets “looks like bluster”, but “the stock markets have had a difficult period lately that could not last forever”, said Craig Erlam, analyst at Oanda.
After their tumble on Monday, interest rates on government bonds in Europe and the United States were still falling sharply. The decline in the 10-year US bond, the benchmark maturity, was the largest in a session since March 2020, said Jim Reid of Deutsche Bank. “It shows how much investors have reassessed things,” he said.
After hovering around 4% last week, the US 10-year borrowing rate was down to just 3.58% around 6:45 a.m. The German rate for the same maturity fell from 2.22% to 1 .80%.
“For now, we can all take a deep breath and enjoy the positive mood in global financial markets,” sums up Swissquote analyst Ipek Ozkardeskaya.
A general increase
All sectors benefited from this renewed risk appetite, including the companies that investors are most worried about. Credit Suisse, plagued by rumors of bankruptcy, rose 4.50% after dropping Monday.
The semiconductor sector was particularly on the front, with STMicroelectronics (+5.18%) in France, Infineon (+4.59%) in Frankfurt or ASML (+5.91%) in Amsterdam.
On the side of oil and currencies
Oil prices continued to rise after their jump on Monday, on the eve of the meeting of OPEC countries and their allies, who could decide to lower their production target.
The barrel of Brent from the North Sea for delivery in December rose by 0.80% to 89.57 dollars, and that of American WTI for delivery in November by 0.79% to 84.38 dollars around 6:25 a.m.
The euro advanced 0.74% to 0.9899 dollars, and the pound 0.33% to 1.1360 dollars around 6:40 a.m.