(Paris) The world stock markets adopted a mixed trend on Wednesday, ahead of the announcements of the American central bank on the evolution of its monetary policy in a context undermined by the banking shock.
European markets, which had recovered nearly 3% in two sessions at the start of the week, ended on a mixed trend: Paris gained 0.26%, London 0.41% and Frankfurt 0.14%, but Milan gave way 0.12%.
The New York Stock Exchange has been hovering around its Tuesday closing level since the open. By 12:50 p.m. EST, the Dow Jones was down 0.27%, the S
Investors are suspended at the conclusion of the two-day meeting of the monetary policy committee of the United States Central Bank (Fed).
The Fed is on a tightrope, torn between the imperative to raise interest rates to fight stubborn inflation and the temptation to curb these hikes in order to avoid further banking upheavals.
“The market expects an increase of 25 basis points”, therefore a “less sharp than expected” increase due to the banking shock which “changes everything” for the Fed, underlines Alexandre Neuvy, manager of Amplegest.
According to him, it is above all the indications of Fed Chairman Jerome Powell on the next rate movements that will be scrutinized.
The fears around US regional banks have not yet completely disappeared. First Republic, which took off 30% on Tuesday thanks to the lifelines of the authorities, fell by 4.57% on Wednesday around 12:50 p.m. (Eastern time).
The Californian establishment Pacwest fell by 10.40% after indicating that it had recorded the withdrawal of 20% of its customers’ deposits since the beginning of the year and having given up launching a new capital increase, according to the agency. Bloomberg Financial Information.
Nevertheless, “ the big lesson to be learned from the bankruptcies of American banks is that the State and the central bank do not let them down ”, notes Alexandre Neuvy, a sign that according to him there will be no “ systemic crisis “.
The European banking sector held steady on Wednesday, according to the broader Eurostoxx 600 Bank Index, after spending much of the session up sharply.
On the bond market, rates for government bonds in Europe rose moderately while those in the United States fell slightly.
The Fed meeting will be followed by that of the Bank of England on Thursday as inflation rose again in February to 10.4%, when economists were betting on a decline. Yields on UK government bonds jumped, to 3.45% for the 10-year maturity.
The real estate sector was the most penalized on Wednesday ahead of the Fed’s announcements. A note from Morgan Stanley Bank estimates that the share price of most European companies in the sector will fall in the face of high interest rates.
The revenues of real estate companies “are under pressure in the face of an inevitable increase in the cost of debt”, underline the analysts, who further note that the banking shock will “most likely lead to a significant reduction in the availability of capital (THE main factor for real estate, in our opinion) and more attention to the quality of banks’ assets”.
URW fell by 7.50% in Paris, Vonovia by 4.50% and Deutsche Wohnen by 2.29% in Frankfurt, CTP by 2.12% in Amsterdam and British Land by 6.89% in London.
British soda maker Fevertree soared 9.46% in London after reporting better-than-expected results in 2022.
Oil rose after an unexpected rise in US hydrocarbon inventories. The barrel of Brent from the North Sea for delivery in May gained 1.16% to 76.21 dollars, while the barrel of American WTI at the same maturity, which is the first day of use as a reference contract, rose. 1.33% to $70.61 around 12:45 p.m. EST.
The euro advanced 0.23% against the dollar to 1.0793 dollars, while the pound strengthened by 0.11% to 1.2230 dollars, after British inflation suggesting further monetary tightening.
Bitcoin rose 2.03% to $28,725.
