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MARKET OVERVIEW. LEuropean stock markets were down on Monday, weighed down by decent economic indicators, while the rest of the market went on the defensive ahead of the US Federal Reserve’s (Fed) monetary policy meeting.
London is closed for a public holiday, as are Hong Kong and Shanghai, reducing volumes and exacerbating volatility.
The New York Stock Exchange posted sharp losses on Friday. The Nasdaq notably plunged more than 4% — and more than 13% in April — its worst drop since 2008, while the S&P 500 and Dow Jones had their worst month since March 2020. Futures ahead of the open announced modest gains across the three indices for this first session of the month.
Stock indices at 7:11 am
In the United States, futures contracts dow Jones rose by 133.00 points (+0.40%) to 33,015.00 points. The futures contracts S&P500 increased by 15.00 points (+0.36%) to 4,142.50 points. The futures contracts Nasdaq rose by 63.50 points (+0.49%) to 12,915.50 points.
In London, the FTSE 100 was closed for a holiday. In Paris, the CAC 40 fell 87.98 points (-1.35%) to 6,445.79 points. In Frankfurt, the DAX fell 90.91 points (-0.64%) to 14,006.97 points.
In Asia the Nikkei Tokyo dropped 29.37 points (-0.11%) to 26,818.53 points. For its part, the hanging singe of Hong Kong has been closed.
On the oil side, the price per barrel is increasing STI American fell $3.13 (-2.99%) to $101.56. The barrel of North Sea Brent rose $0.16 (+0.15%) to $109.50.
European equity markets experienced a sudden and spontaneous drop earlier just before 4:00 am Quebec time. The Paris CAC 40 index fell 3.4%, the Eurostoxx 50 fell 2.9% and in Stockholm the OMX 30 index fell as much as 8%, according to Bloomberg, which claims that the operator in charge of the Swedish course movement examined.
The reason for these fluctuations is unclear to some analysts, who even spoke of a “lightning bolt” on Twitter.
For Andrea Tuéni, analyst at Saxo Bank, the release of manufacturing growth at its lowest since January 2021 in the euro zone in April (S&P Global PMI Composite Index) is the only significant indicator for the markets on Monday.
The report “highlights supply tensions,” particularly due to restrictions in China, and the clouded demand outlook, showing that “euro-zone manufacturing is going through a somewhat complicated period,” he told AFP.
Andrea Tuéni adds that “these figures reflect those published in China”: manufacturing activity there fell in April to its lowest level since February 2020, due to the restrictions in the country’s major cities.
Sanitary measures are not being eased, and in Beijing authorities announced on Saturday they would be stepping up by making new tests mandatory for access to certain public places.
Tokyo ended in decline, wait ahead of Fed meeting before closing three days for ‘Golden Week’ in Japan.
However, Monday morning’s move should be seen in the context of the 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.
Oil prices were impacted by fears over Chinese demand and by the 6th package of sanctions prepared by the European Commission against Russia’s oil ecosystem.
Investors are also keeping an eye on the Fed’s policy meeting on Tuesday and Wednesday.
After raising interest rates by 0.25 percentage points in March, the Fed is set to ratify a surprise hike of half a percentage point this time, and is also expected to start trimming its balance sheet to combat inflation in the United States at its highest level since 40 years.
Sectors dependent on economic growth collapsed on Monday, such as the automobile Stellantis which lost 2.14%, Renault 1.38% and bmw 1.08%.
The technology sector declined due to rising lending rates. STMicroelectronics yielded 3.22%, Dasault systems 2.19% and Infineon 2.46%.
The euro lost 0.21% to $1.0523, a historically low level.
that Bitcoin rose 1.23% to $38,790.