(Paris) Stock markets are struggling to rebound on Monday, after a difficult week marked by concerns about China and the sharp rise in bond rates ahead of an important meeting.
After opening higher, Wall Street split: the Dow Jones fell 0.65%, the S
On the Old Continent, Paris gained 0.47%, Milan 0.81%, Frankfurt 0.19%. European markets, however, released much of their gains earlier in the session and London even ended in the red (-0.06%).
In an indicator-poor session, the main news came from China with the drop in one of the Chinese Central Bank’s interest rates. The extent of the decline was less than expected by the markets and the country’s stock markets ended in the red from Shanghai (-1.24%), Shenzhen (-0.96%) to Hong Kong (- 1.82%).
“We have been waiting for a Chinese recovery plan for a month and a half. The public debt is very high so it’s complicated, especially with the level of interest rates. And you have to be careful with the currency in the event of a sharp cut in central bank rates: the country exports a lot so needs a strong currency,” explains Charles de Riedmatten, equity manager at Myria AM.
On the bond market, after a breather on Friday, interest rates started to rise again. The interest rate on US 10-year debt is at its highest since 2007: around 11:40 a.m. (ET) it stood at 4.35%, against 4.26% Friday at the close . That of Germany was at 2.71% against 2.62% at the close on Friday.
Investors are eagerly awaiting the annual meeting of central bankers in Jackson Hole, US, where US Federal Reserve (Fed) Chairman Jerome Powell is due to deliver a speech on Friday.
The global real estate sector is struggling on Monday, weakened by tensions in the sector in China and the rise in interest rates which weigh on the level and price of transactions.
After Chinese stocks of companies in the sector fell, in London, giant Persimmon lost 3.82%, Taylor Wimpey 4.26%, Hammerson 4.60% and Crest Nicholson 7.84% after its results. The German Tag Immobilien fell 3.46% in Frankfurt and Vonovia 2.61%.
Electric truck maker Nikola collapsed 22.44%, suffering the impact of a costly recall of its batteries after incidents involving fire starts.
The group warned on Monday that it may not meet its vehicle delivery targets this year.
The automotive supplier Continental (5.87%) was sought after press information, confirmed with AFP, on the preparations launched for a sale of the activity producing rubber parts for automobiles, in order to increase its potential in a rapidly evolving sector.
Cybersecurity software firm Palo Alto Networks soared 16.15% after better-than-expected earnings per share. Even if its quarterly turnover was a little disappointing, it is 26% higher than last year at the same time.
Oil prices stabilized on Monday, caught between growing tensions on the market and measures to stimulate the Chinese economy deemed insufficient, when European gas jumped again (10.13% to 40.10 euros per megawatt hour around 11 a.m. 30 p.m. Eastern Time), prompted by strike threats in Australia.
A barrel of Brent North Sea, for October delivery, gained 0.29% to $85.05 and its US equivalent, a barrel of West Texas Intermediate (WTI), for September delivery, gained 0.54% at $81.69.
On the foreign exchange market, the euro took 0.13% against the dollar, to 1.0887 dollars for one euro.
