(Paris) European stock markets ended sharply lower on Monday, suffering from profit taking after a largely positive past week, as well as a rise in interest rates.
In reduced trading volumes in the absence of American investors, Paris lost 1.01%, Frankfurt 0.96%, London 0.71% and Milan 0.39%.
The New York Stock Exchange as well as the US bond market remain closed due to a holiday commemorating the end of slavery in the United States.
In the European bond market, the yield on British two-year government bonds rose to more than 5% on Monday, a 15-year high, as investors resigned themselves to further tightening by the Bank Central England, which holds its next meeting on Thursday.
In Paris, the 10-year loan exceeded the 3% mark again, at 3.03%.
“The risk for the financial markets in the coming months is to be confronted with weak economic growth, or even a risk of recession in the United States, all in a monetary context which may still tighten,” said Alexandre Baradez , IG France analyst.
Last week, the American (Fed) and European (ECB) central banks maintained an offensive tone, hinting that further increases in key interest rates could be decided in the coming months.
The chairman of the Fed is heard before the US Congress on Wednesday and Thursday.
In Asia, the Bank of Japan remained accommodative and that of China even lowered its rates, in particular because of the “lack of momentum with the publication of economic figures very often below expectations” in the country, continues Mr. Baradez .
On the geopolitical side, Chinese President Xi Jinping on Monday hailed “progress” in China-US relations thanks to a visit to Beijing by US Secretary of State Antony Blinken, although deep disagreements remain between the two powers.
The interview comes on the second and final day of Mr. Blinken’s visit to China, the first in nearly five years for a top US diplomat.
On the first day of the Le Bourget air show, companies in the aviation sector made progress.
The aircraft manufacturer Airbus won the largest order ever in civil aviation on Monday, with 500 Airbus A320s for the Indian company IndiGo. The action took 0.23%, while the engine manufacturer Safran finished best company in the Parisian CAC 40 with 1.74%.
In Frankfurt, the title of the Munich engine manufacturer MTU Aero Engines (4.19%) took off after the announcement of raised forecasts for the year, with an adjusted operating profit (EBIT) which should now climb to more than 800 million euros. Frankfurt airport operator Fraport gained 1.93%.
The British clothing group Next jumped 4.72% on the London Stock Exchange after the announcement of sales up more than 9% over the past seven weeks, against initial forecasts of a decline. An improvement attributed to milder weather from May and recent wage increases in Britain.
Oil prices are falling as investors remain concerned about Chinese demand for black gold, with increased Iranian exports also weighing on prices.
Around 11:30 a.m. (Eastern time), a barrel of Brent from the North Sea, for delivery in August, fell 0.70% to 76.07 dollars.
Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in July, lost 0.81% to 71.20 dollars.
The European currency was down slightly (-0.12%) against the dollar at 1.0926 dollars and bitcoin stable at 26,400 dollars.