European indices at their lowest for two months – archyworldys

(Reuters) – The main European stock markets fell sharply at the start of the session on Monday, pending decisions by the US Federal Reserve and fears over the Chinese real estate market favoring risk aversion.

In Paris, the CAC 40 lost 1.69% to 6,459.38 points at 07:40 GMT, after falling to the lowest since July 21 at 6,442.30. In London, the FTSE 100 lost 1.14% and in Frankfurt, the Dax fell by 1.84%.

The EuroStoxx 50 index is down 1.67%, the FTSEurofirst 300 1.58% and the Stoxx 600 1.47%, its biggest drop since July 19.

The EuroStoxx 50 volatility index, a barometer of investor nervousness, has jumped to its highest level since mid-May.

The Fed, which brings together its monetary policy committee on Tuesday and Wednesday, will not necessarily announce the start of “tapering”, the gradual reduction in its bond purchases, but it could clarify its intentions in this area. And its forecasts for growth, unemployment, inflation and especially interest rates will inevitably influence financial markets.

At the same time, investors remain concerned about the financial difficulties of Evergrande, the number two in the Chinese real estate market, a possible default of which could have repercussions on much of the financial system of the world’s second-largest economy.

Mainland Chinese markets are closed and will not reopen until Wednesday, but in Hong Kong, Evergrande shares fall again 11.81%, to an 11-year low, and the local Hang Seng index is down 3.42%.

“September has historically been a difficult month for the markets, but this time around, investors appear less optimistic about the Fed’s upcoming policy change, the systemic risk in China and the slowing economic recovery, hampered by growing cases of Delta variant infections “, summarizes Saxo Banque in its daily note.

None of the major sectors of the European quotation escaped the decline, but the most marked decline affected the commodities compartment, whose prices suffered from the rise of the dollar and whose Stoxx index fell by 3.28%.

The largest drop in the Stoxx 600 is for the Anglo American mining group (-5.58%) and in Paris, the steelmaker ArcelorMittal fell 5.09%.

On the rise, Lufthansa, which lost ground at the opening, now gains 3.64% after the announcement of a capital increase of 2.14 billion euros which should allow it to repay the aid received from the German Federal State before resuming the payment of dividends.

(Report Marc Angrand, edited by Jean-Michel Bélot)