The fears of a reconfinement weigh on the stock markets – archyde

by Claude Chendjou

PARIS (Reuters) – European stock markets ended lower on Friday and Wall Street was in disarray at mid-session with the Dow Jones falling as equity markets weighed down by renewed risk aversion linked to the threat a general reconfinement of the population in several countries, against the backdrop of the resurgence of the COVID-19 pandemic.

In Paris, the CAC 40 ended down 0.42% to 7,112.29 points. The British Footsie dropped 0.45% and the German Dax 0.38%.

The EuroStoxx 50 index fell 0.62%, the FTSEurofirst 300 0.25% and the Stoxx 600 0.33%.

Over the week as a whole, the Parisian CAC 40 however gained 0.29%, thanks to several records set in the last sessions, while the Stoxx 600 lost 0.14%.

Risk aversion is mainly fueled by Austria’s decision, faced with a new outbreak, to reinstate national containment from Monday – a first in Western Europe since last spring – and to impose the obligation vaccine.

In Germany, the leading economic power of the Old Continent, Jens Spahn, the Minister of Health, said on Friday that general confinement in the country was not excluded.

Faced with the resurgence of the epidemic, in the United States, the Food and Drug Administration, the health authority, on Friday authorized a booster dose for all adults already fully vaccinated.

A WALL STREET

At the time of the close in Europe, the Dow Jones fell 0.48%, the Standard & Poor’s 500 gnawed 0.11%, while the Nasdaq advanced 0.71%, heading towards a record close.

The renewed concern on the health front is prompting investors to take refuge in the safest assets, in particular technology stocks, for which the compartment grew by 0.92%.

On the other hand, the fall in bond yields weighed on financial stocks (-1.01%) and more particularly on the banking sector (-1.53%).

Groups linked to the transportation and leisure sector are also suffering, while oil giants, such as Exxon Mobil (-4.71%) and Chevron (-2.64%), fall in the wake of the drop in crude prices. .

In terms of business results, accounting software publisher Intuit jumps more than 10% on the strength of its 2022 forecasts, while Foot Locker, one of the latest distributors to publish its financial accounts, plunges closely 12%, heading for its worst session since September, following its fourth-quarter forecast.

VALUES IN EUROPE

In Europe, the most marked sector decline was to the credit of banks, which suffered both from their exposure to the economy and the impact of the fall in bond yields.

In Paris, BNP Paribas dropped 3.02%, Societe Generale 2.53% and Crédit Agricole 1.35% while in Frankfurt, Deutsche Bank fell 4.92%.

The automotive sector (-1.39%) and that of transport and leisure (-1.47%) also suffered from the news of the reconfinement in Austria. The specialist in airport stores Dufry lost 3.18%.

The healthcare sector (+ 0.54%), real estate (+ 0.59%) and technology (0.32%) are the few to have finished in the green on the Stoxx 600.

CHANGES

At exchange rates, the prospect of a reconfinement in Europe weighs on the euro, which depreciates by 0.47% against the dollar at 1.1314.

The dollar, a safe haven, is logically sought after, allowing the index which measures its fluctuations against a basket of benchmark currencies to advance by 0.31%.

RATE

The renewed caution in the markets is also reflected in an influx of government bond purchases, which is lowering their yields. Those of the ten-year German Bund contracted 6.3 basis points to -0.343%, while their French counterparts fell 5.6 points to 0.0090%.

In the United States, ten-year Treasury bond yields drop 5.8 points to 1.5291%, despite comments from Christopher Waller, one of the governors of the US central bank, who urges the Fed to step up tapering and raising rates.

OIL

The oil market is heading for a fourth consecutive weekly decline, affected this Friday by renewed concerns about COVID-19, which could have an impact on global demand for crude.

A barrel of Brent fell 3.87% to $ 79.11, while that of US light crude (West Texas Intermediate, WTI) fell 4.61% to $ 75.37.

(Report Claude Chendjou, edited by Sophie Louet)