EUROPEAN STOCK MARKETS UP MID-SESSION by Claude Chendjou PARIS (Reuters) – Wall Street is expected to fall slightly on Tuesday, while European stock markets continue their five-day rally mid-session thanks in particular to the rise in defensive and mining stocks but worries about a possible recession limit the gains. Futures on New York indices signal an opening on Wall Street down 0.06% for the Dow Jones, 0.10% for the Standard & Poor’s 500 and 0.12% for the Nasdaq. In Paris, the CAC 40 took 0.37% to 6,594.36 around 11:20 GMT. In Frankfurt, the Dax advanced by 0.6% and in London, the FTSE gained 0.58%. The pan-European FTSEurofirst 300 index gained 0.31%, the Eurozone EuroStoxx 50 0.4% and the Stoxx 600 0.32%. “A lot of this (rally) is based on technical and dynamic aspects, but the fundamentals have not changed,” comments Seema Shah, strategist at Principal Global Investors, noting in particular the deterioration of several economic data. The survey by the ZEW economic research institute published on Tuesday shows that investor sentiment in Germany has deteriorated further since the beginning of August with an index down to -55.3 while the first economy of Europe is already on the verge of recession. In the United Kingdom, the labor market began to decelerate in the second quarter, while inflation cut wages, according to official statistics published on Tuesday. While the British gross domestic product (GDP) contracted by 0.1% in the second quarter, the figures for the second estimate of growth in the euro zone are particularly expected on Wednesday and also encourage caution. VALUES TO FOLLOW ON WALL STREET Walmart gains 3.5% in pre-market trading after announcing on Tuesday that it now expects a lower decline in annual profit than previously anticipated, promotions and lower fuel prices which made it possible to exceed expectations for the quarter ended at the end of July. Home Depot, on the other hand, lost 1.5% in pre-market trading, the DIY and home improvement giant having simply confirmed its annual forecasts and reported a 3% drop in transactions in its stores in the second quarter. VALUES IN EUROPE Commodities (+2.81%) and defensive sectors such as telecoms (+1.33%) and utilities (+0.97%) posted one of the best progressions of the pan-European Stoxx 600. The first compartment is benefiting from the good results published by the mining giant BHP, whose London-listed share is up 4.63%. Meal delivery specialist Delivery Hero (+7.29%) is driven by its third quarter growth forecast, while jeweler Pandora and hearing aid manufacturer Sonova are down 1.99% and 13% respectively. 9% after the publication of their quarterly results. Excluding the publication of accounts, Philips advances by 4.28% after the unexpected announcement of the replacement of its managing director Frans van Houten by Roy Jakobs, head of the Connected Care activities of the group, while the British cybersecurity firm Darktrace jumped 23, 14% after entering into discussions with the American private equity firm Thoma Bravo. EXCHANGE Fears of a recession are supporting the dollar, which on Tuesday touched its highest since August 8 against other major currencies. The greenback gained 0.27% at mid-session. The euro, down 0.3%, is trading at 1.013 dollars. RATES On the bond market, yields vary little: that of the ten-year German Bund, a benchmark in the euro zone, takes a little more than two basis points to 0.92% and that of US Treasury bonds of the same maturity is almost unchanged at 2.793%. OIL Oil prices, which fell around 3% on Monday, fell again on Tuesday amid fears of a deterioration in demand in the light of the latest Chinese economic indicators and pending a possible Iranian nuclear agreement which could allow Tehran to resume crude exports. The barrel of Brent yields 0.65% to 94.48 dollars and that of American light crude (West Texas Intermediate, WTI) 0.29% to 89.15 dollars. (Written by Claude Chendjou, edited by Kate Entringer)
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