European stock markets were in the red on Monday, weighed down by reasonable economic indicators, while the rest of the markets are on the defensive ahead of the US Central Bank (Fed) monetary policy meeting.
At around 10:30 GMT, Paris was down 1.37%, Frankfurt 0.63% and Milan 0.93%. The European benchmark, the Eurostoxx 50, yielded 1.54%. In Switzerland, the flagship SMI index fell by 0.83%.
London is closed for a public holiday, as are Hong Kong and Shanghai, which reduces volumes and exacerbates variations.
Just before 08:00 GMT, the European stock markets experienced a sudden and spontaneous decline. The Paris CAC 40 index fell by 3.4%, the Eurostoxx 50 by 2.9% and in Stockholm the OMX 30 index even fell by 8%, according to Bloomberg, who claims that the operator of the Swedish place is investigating this move. .
The reason for these variations is unclear to some analysts, who even speak of a ‘flash crack’ on Twitter.
For Saxo Bank analyst Andrea Tuéni, the release of manufacturing growth at its lowest point since January 2021 in the eurozone in April (S&P Global PMI Composite Index) is the only notable indicator for markets on Monday.
The report “highlighted tensions on inventories,” particularly due to restrictions in China, and the clouded demand outlook, indicating that “the euro-zone manufacturing sector will go through a somewhat complicated period,” he told AFP.
Andrea Tuéni adds that “these figures are in line with those published in China”: manufacturing activity there fell in April to its lowest level since February 2020 due to the lockdown of the country’s major cities.
Sanitary measures will not be relaxed and in Beijing authorities on Saturday announced they would be strengthening them by mandating new tests for access to certain public places.
Tokyo ended 0.11% lower ahead of the Fed meeting before closing three days before “Golden Week” in Japan.
Monday morning’s move, however, should be seen in a context of high volatility that has been driving markets for several weeks, with stock indices reacting strongly to the slightest news about the situation in China, inflation, the geopolitical context and monetary policy.
On Friday, the New York Stock Exchange posted heavy losses. Notably, the Nasdaq fell more than 4% — and more than 13% in April — its worst decline since 2008, while the S&P 500 and Dow Jones had their worst month since March 2020. Their futures showed all three indices slightly lower. looking ahead of the outstanding.
Oil prices were impacted by fears over Chinese demand and the sixth sanctions package launched by the European Commission against Russia’s oil ecosystem.
At around 10:25 am GMT, a barrel of Brent from the North Sea for delivery in July, the first trading day as a benchmark contract, fell 2.59% to $104.37.
The barrel of American West Texas Intermediate (WTI) for June delivery lost 2.95% to $101.61.
Investors are also anticipating the Fed’s monetary policy meeting on Tuesday and Wednesday.
After a 0.25 percentage point hike in the key rate in March, this time, surprisingly, the Fed will ratify a half percentage point hike and should also start to scale down its balance sheet to try to contain inflation. fighting at its highest point in 40 years in the United States.
Car and tech penalized
Sectors dependent on economic growth fell Monday, such as the auto industry, with Stellantis losing 2.14%, Renault 1.38% and BMW 1.08%.
The technology sector declined as a result of rising lending rates. STMicroelectronics returned 3.22%, Dassault Systèmes 2.19% and Infineon 2.46%.
On the side of the euro and bitcoin
The euro lost 0.21% to $1.0523, a record low.
Bitcoin gained 1.23% to $38,790.