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MARKET OVERVIEW. Bullish winds blew through equity markets on Monday on inflation and central bank tightening, but G7 announcements calmed their momentum.
After a higher open, European equity markets were more mixed.
In Asia, Hong Kong benefited from the strong performance of Chinese tech stocks and the People’s Bank of China’s injection of liquidity into the market. Shanghai and Tokyo also landed in the green.
On Friday, according to indices, Wall Street had landed strongly with around 3%. Around 7:55 am Quebec time, futures contracts for the three major indices were pointing to a higher open.
Stock market indices at 8:35 am
The futures contracts dow Jones rose by 79.00 points (+0.25%) to 31,566.00 points. The futures contracts S&P500 recorded an increase of 14.25 points (+0.36%) to 3,930.50 points. The futures contracts Nasdaq rose by 56.75 points (+0.47%) to 12,197.25 points.
In London, the FTSE 100 rose by 45.03 points (+0.62%) to 7,253.84 points. In Paris, the CAK 40 recorded a decrease of 10.54 points (-0.17%) to 6,062.81 points. In Frankfurt is the DAX recorded an increase of 86.35 points (+0.66%) to 13,204.48 points.
In Asia the Nikkei Tokyo rose 379.30 points (+1.43%) to 26,871.27 points. For its part, the hanging singe Hong Kong gained 510.46 points (+2.35%) to 22,229.52 points.
On the oil side, the price per barrel is increasing STI American rose $0.30 (+0.28%) to $107.92. The barrel of North Sea Brent rose $0.56 (+0.50%) to $113.68.
“Friday’s rally had all the hallmarks of a bear market rally and does not inspire confidence that a bottom has finally been made,” said Markets.com analyst Neil Wilson.
Investors had regained some optimism, believing that recent economic data releases gave central banks leeway not to hike interest rates too much.
“If this week’s inflation data started to point to a slowdown, the market would start to believe that the Federal Reserve has regained control of the situation,” explains Neil Wilson.
He adds that “the sooner the Fed regains control, the sooner the bull cycle will end,” ensuring a better environment for markets.
Nevertheless, the G7 summit unsettled investors: the countries are considering a “mechanism to cap Russian oil prices at a global level”, they want to jointly “further restrict Russia’s access to crucial industrial resources”, especially in the defense sector, and they want to “the application tariffs on Russian products to help Ukraine,” said a senior White House official.
According to these statements, the oil prices moved around the equilibrium.
And gold rose 0.38% to $1,833.73 an ounce after US President Joe Biden and British Prime Minister Boris Johnson announced an embargo on Russian gold imports.
This week, investors will follow the forum hosted by the European Central Bank (ECB) where ECB President Christine Lagarde, US Federal Reserve Chair Jerome Powell and Bank of England Governor Andrew Bailey will speak.
“We could well get some palatable elements that would create short-term volatility,” Jeffrey predicts Halley.
Also on the agenda for next week are the release of economic indicators for China and the United States, as well as inflation figures for the euro zone and the United States.
Technology stocks continued to benefit, as they did last week, from lower bond yields, allowing them to fund their growth at lower cost.
In Frankfurt, hello fresh increased by 6.42%, Zalando 5.85% and Infineon by 2.16%. In London, dark trail took 3.01% and Deliveroo 5.24%.
Around 7:50 am Monday, European government bond yields rebounded about 10 basis points after losing 35 last week.
The euro rose 0.12% to $1.0566 around 7:50 am.
The Turkish lira staged its strongest rebound of the year on Monday after a new stimulus measure was announced, requiring some banks to sell their foreign exchange reserves. The pound is up 2.23% against the dollar to trade at 16.56 pounds to the dollar.
the Bitcoin stabilized at $21,310 (-0.36%).