(Paris) European stock markets closed slightly lower on Monday, after a session without much movement in the absence of American investors due to a public holiday in the United States, and for lack of major economic publication.
Paris ended down 0.24%, London dropped 0.16% and Frankfurt remained close to balance (-0.10%).
“The US markets are closed today,” due to a holiday (Labor Day), “and we end up with rather low trading volumes,” says IG France analyst Alexandre Baradez.
Investors’ attention focused on China at the start of the session, as European stock market indices were supported by the performance of Asian stock markets thanks to renewed confidence in the real estate sector.
Investors were relieved in particular by the announcement of the postponement of repayment of a debt of the ultra-indebted real estate giant Country Garden, scheduled for the weekend.
However, “the momentum generated by the Asian markets has run out of steam”, observes Michael Hewson, analyst at CMC Markets, with investors fearing that “these gains are above all only an automatic reaction to a slight rebound in housing sales in two Chinese cities,” he explains.
The market will thus be attentive “to the PMI of services in China and in the eurozone on Tuesday. The latter should continue to show a decline in activity, and even a continuation of the contraction in the euro zone, “commented Vincent Boy, analyst of IG France.
In addition, “the weakness of the macroeconomy in Europe and China” is confronted with “still restrictive monetary messages from central banks”, notes Alexandre Baradez.
On Monday, the president of the European Central Bank (ECB) gave a speech in London in which she gave no indication of what the monetary institution might decide at its next meeting on September 14.
“We have the impression that we are still threatened by a rate hike in Europe”, comments Alexandre Baradez.
Also this week, the Australian and Canadian central banks “have to announce their monetary policy and the markets are waiting for a break from them”, underlines Vincent Boy.
In addition, “the Federal Reserve’s (Fed) “beige book” on the economic outlook is also expected Wednesday evening,” he adds.
In Frankfurt, Volkswagen was treading water (-0.02%) while its flagship factory in Wolfsburg will have to partially stop for several weeks in September due to problems with the supply of parts from Slovenia, following bad weather on place, according to the German press.
Mercedes-Benz gained 0.97% and BMW 0.30% as the Munich Motor Show (IAA), one of the biggest in the world, is in full swing.
Crude prices were on the rise as the market watched for potential announcements from Saudi Arabia and Russia on extensions to their oil production and export cuts.
Around 12 p.m. EST, a barrel of Brent North Sea crude for November delivery was up 0.44% at $88.94.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in October, gained 0.45% to $85.93.
The dollar was trading small against the euro and the pound as investors were still digesting the latest US jobs numbers in a sluggish foreign exchange market due to a public holiday.
The dollar fell 0.17% to 1.0799 dollars to the euro, and lost 0.28% against the pound to 1.2625 dollars to the pound.