(New York) European stock markets ended sharply lower on Monday, not reassured by the ongoing banking shock in the United States, apprehension overcome by Wall Street thanks to giant capitalizations and lower bond rates.
European markets picked up a few colors from their lows at the start of the afternoon, but ended down sharply.
The CAC 40 lost 2.90% in Paris, the Dax in Frankfurt 3.04% to end below 15,000 points and the FTSE 100 in London dropped 2.58%, while the Milan Stock Exchange ended down 4.03%.
On Wall Street, the Dow Jones fell 0.28%, the NASDAQ index gained 0.45% and the broader S
Wall Street had opened in the red, like the European markets, frightened by the crisis which has hit the American banking sector for several days, to the point of pushing the American authorities to guarantee, in fact, all of the deposits of American customers on Sunday. .
But the indices quickly recovered, ending around breakeven, thanks in part to “interest-rate sensitive sectors, which rose on falling bond yields,” Edward Moya said in a note. , from Oanda.
The yield on 2-year government bonds thus contracted by almost 0.6 percentage point, to 3.99% against 4.58% on Friday at the close. Over three days, it has just experienced its biggest drop since the famous Black Monday of October 19, 1987.
Operators have completely revised their projections in terms of monetary policy and now see the Fed (American central bank) curbing, then lowering its rates by the end of the year, while they still counted on Friday on a continuation of the tightening by forced march.
This outlook and the sharp drop in bond yields have benefited some companies in the technology sector, which are highly dependent on borrowing conditions to finance their sustained growth.
The New York market has also been able to count on “mega caps”, giant capitalizations, many of which come from the technology sector. “They have strong balance sheets and pose no immediate risk,” commented Patrick O’Hare of Briefing.com.
Apple (1.33%), Microsoft (2.14%) and Amazon (1.87%), which weigh more than 4000 billion dollars in total, pulled the odds alone.
Despite Wall Street’s strength, “concern remains about regional banks,” said Nick Reece of Guinness Global Investors.
“Some fear further bankruptcies, seeing the value of the shares (of these banks) wiped out and say to themselves that it is not a risk that they want to take,” the manager continued.
On the front line, the Californian establishment First Republic, cut by 61.83% on Monday’s single session.
Despite its status as a regional bank, First Republic is nonetheless the 14th largest financial institution in the United States and weighs more than $212 billion in assets.
She was not the only one in the sights of investors. Other regional brands suffered, including Western Alliance (-47.06%), the Cleveland bank KeyCorp (-24.36%) or the Texas establishment Comerica Bank (-27.67%).
On Friday, European banking stocks fell again on Monday, with an even more marked movement for banks perceived as less solid: the German Commerzbank unscrewed by 12.71%, while Credit Suisse dropped 9.58% . The French BNP Paribas and Société Générale fell by 6.80% and 6.23% and the Italian Unicredit by 8.49%.
In London, the banking giant HSBC, which bought the British branch of Silicon Valley Bank (SVB) on Monday for a symbolic pound, lost 4.13% to 568.10 pence. Standard Chartered (-6.89% to 688.80 pence) and Barclays (-6.31% to 147.48 pence) also suffered.
The pharmaceutical sector, considered less sensitive to the economic climate, was on a roll, driven by the announcement of the takeover of the biotech Seagen (14.51%), specializing in cancer treatments, by the giant Pfizer (1, 19%), for $43 billion.
The biotech Amgen (2.33%) was sought, as were the Moderna laboratories (6.95%) or Eli Lilly (3.01%).
The dollar fell against other currencies, undermined by anticipation of a brake from the Fed, the euro recovered 0.80% to 1.0729 dollars and the pound 1.21% to 1.2176 dollars.
Bitcoin soared 15% to $24,229 on hopes of looser monetary conditions and a weaker dollar.
