At the open on Wednesday, European stock markets recovered from a nearly 3% drop the day after the Norwegian government’s announcement on gas production, sending indices to their lowest since spring 2021.
Wall Street edged higher on Wednesday ahead of the latest policy committee report from the US Federal Reserve, whose more restrictive policy sent the dollar to a 20-year high against the euro. US markets have moved around balance. Shortly after 14:05 GMT, the Dow Jones gained 0.22%, the S&P 500 gained 0.18% and the Nasdaq gained 0.19%.
“Fear of large economies going into recession”.
On Tuesday, some of the heavy losses were compensated by the financial centers of Europe, about 3%: Paris by 2.15%, Frankfurt by 2.11%, Milan by 1.63%. London followed the pace (+1.70%), despite the political instability in the United Kingdom, much weakened by the resignation of several members of Boris Johnson’s government. Despite the gains in European stocks, analysts remain cautious about the overall environment. “Over the last few days, there have been growing fears in the market that the major economies are going into recession,” confirmed Sebastien Paris Horwitz, director of research at La Banque Postale AM. Persistent inflation, rising commodity prices, but also health restrictions in China, where the lockdown of several million residents on Wednesday sparked a resurgence of the epidemic, have plagued markets since the start of the year. Evidence of concerns about the European economy. The euro fell below $1.02 for the first time since December 2002. By 14:05 GMT, it was trading at $1.0175, down 0.88%.
A safe haven prized by investors in uncertain times, the dollar is also appreciating due to the difference between the period of monetary tightening by the US Federal Reserve (Fed), which is already well underway, and the period of monetary tightening by the European Central Bank. not yet translated into action. The Fed has already raised its key interest rates three times, including one by 75 basis points at its last meeting. The always eagerly awaited report of the discussions by the markets, the “minutes”, will be published at 18:00 GMT. In the bond market, government bond yields continued to weaken in Europe, while interest rates stabilized in the US. It rose to 2.81% for the US 10-year, up from a peak of 3.47% in mid-June and was still at 3% on June 30.
The gas stabilizes
The intervention of the Norwegian government to guarantee gas production and delivery to European countries calmed the market somewhat. The price of the benchmark natural gas contract stabilized (+0.75% to EUR 166 per megawatt hour) after increasing in recent days. Oil prices started to fall again after starting to recover earlier in the day. The price of a barrel of Brent for September delivery fell 1.24% to $101.47, while the price of US WTI crude oil for August was 1.61% to $97.89 around 1:50 p.m. Energy giant TotalEnergies (-1.97%) announced on Wednesday that it has sold its 20% stake in the Kharyaga field in the Russian Arctic to Russia’s Zaroubejneft, which has already inherited the site’s operator role since 2016. .
Technology is recovering
The technology sector rallied after bond yields fell on Tuesday. In Paris, STMicroelectronics rose by 4.43%, Dassault Systèmes by 4.45%. In Frankfurt, Infineon gained 4.08%, Zalando gained 6.26% and SAP gained 3.42%. Amsterdam meal delivery specialist Just Eat Takeaway jumped 20% after announcing a commercial partnership with Amazon (-0.17%) that will take a stake in Grubhub Group’s U.S. subsidiary.
3M pays €571 million to settle lawsuit
U.S. multinational 3M (-0.67%) agreed Wednesday with regional authorities in Belgium’s Flanders to fix a total of 571 million euros worth of emissions around its plant in Zwindrecht, near Antwerp (north).
Bitcoin is going down
Bitcoin lost 1.21%, just above the $20,000 mark, around 11:35 GMT.
Source: Le Figaro
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.