European equity markets take a breather, US markets closed

(Paris) European equity markets recovered a bit on Monday after two weeks of strong concerns about global growth and being closed for a holiday in the absence of US markets.

Posted at 7:03 am
Updated at 5:47 p.m

London rose the most by 1.50%, followed by Frankfurt (+1.06%) and Milan (+0.99%). The day after the French general elections, in which President Emmanuel Macron lost the absolute majority in the National Assembly, Paris won less (+0.64%).

The outcome of the French election did not appear to cause concern in the markets, with the euro rising 0.32% against the dollar to $1.0533 around 11:45 am, lower than last week.

But the rise in stock prices represents only a “small part of the severe losses” of the past two weeks, notes Oanda analyst Craig Erlam.

Investors benefited last week from the announcement of significant interest rate hikes by the central banks, above all the US Federal Reserve, with an increase of 0.75 percentage points.

The Fed hopes to bring inflation back under control through tightening policies affecting economic activity, while inflation has been raging for several months with little sign of slowing down. Inflation “is no longer a priority issue,” notes Mr. Erlam.

Conversely, indicators of an economic slowdown in the United States have multiplied, making the possibility of the country slipping into recession more credible.

In Europe, too, the President of the European Central Bank, Christine Lagarde, confirmed on Monday before a committee of the European Parliament that the ECB would raise key interest rates by 25 basis points at the next meeting in July.

Decline in Oil and Metals

Metal prices continued to be weighed down by fears of an economic recession.

On the London Metal Exchange (LME), copper prices traded below $9,000 a tonne after hitting their lowest level since October. Iron ore shed more than 7% on the Singapore Stock Exchange last week, trading at around $127.25 a tonne on Monday.

Oil prices recovered somewhat after last week’s sharp declines.

The barrel of America’s WTI rose 0.47% to $110.07 around 11:30 a.m., and the barrel of North Sea Brent rose 0.47% to $113.76.

The construction suffers, the transport jumps

Irish construction giant Kingspan was unwound after warning of deteriorating market conditions. The stock fell 11.38% in Dublin, dragging the entire sector down with it: Saint-Gobain (-3.99%) in France, Barratt (3.71%) and Berkeley (-4.14%) in London.

Several large companies in the transport sector surged after several moves lower: in Paris, Renault took 9.74%, Safran 5.69% and Airbus 3.04%, following an analyst recommendation.

Airlines IAG (+7.24%), Lufthansa (+7.62%) and Air France (+7.87%) also excelled on the day of the International Transport Association Air’s annual general meeting. Notably, she reiterated that “sector-level profitability looks within reach in 2023.”

Toronto rises

A broad-based rally on Monday allowed the Toronto Stock Exchange’s flagship index to partially recover from last week’s slump, the deepest in more than two years.

Colin Cieszynski, chief markets strategist at SIA Wealth Management, noted that many sectors were about to start the trading week, which is not unusual when the Toronto market is open and US stock markets are closed.

“So it’s a decent day for Canada considering the United States was closed and foreign markets weren’t doing much,” he said in an interview.

The Toronto Floor’s S&P/TSX Composite Index gained 253.15 points, or 1.3%, to end the session at 19,183.63 points. Over the past week, it was down 6.6%.

After hitting hard last week, the shutdown of US markets likely helped ease selling pressure, Cieszynski said.

“The kind of relentless selling pressure we’ve seen for most of this month just seemed to take a day off. »

Utilities were the only declining sector on the TSX. The other ten advanced, led by telecoms and energy.

The telecoms giant rose 3.6% as investors welcomed the announced sale of Freedom Mobile, Shaw Communications’ wireless operator, to Quebecor-owned Videotron for $2.85 billion.

Rogers’ action took 5.9%, Shaw’s won 7.8% and Quebecor’s 5.8%.

The energy giant also had a strong performance, rising 2.5% on higher crude oil prices. Suncor shares gained 4.6%.

In the foreign exchange market, the Canadian dollar traded at an average rate of 76.96 US cents, up from 76.72 US cents on Friday.

Gold prices rose 10 cents to $1840.60 an ounce and copper fell less than 1 cent to $4.01 a pound.

bitcoin fights

Bitcoin fell as low as $17,599 on Saturday, its lowest level since December 2020.

Cryptocurrencies are suffering even more as central bank policies increase the cost of money.

At around 11:45 a.m., Bitcoin was worth $20,670, up 0.26% from the previous close, but plummeted about 70% in value from its all-time high on November 10, 2021 at $68,991.

With the Canadian Press

Leave a Comment