PARIS (Reuters) – Major European stock exchanges are expected to be close to break even on Tuesday as caution narrows the gap between renewed uncertainty over China’s health situation and anticipation of mid-term election results in the United States.
Index futures suggest a 0.08% rise for the Dax in Frankfurt and 0.03% for the EuroStoxx 50 but a 0.5% drop for the FTSE 100 in London. As for the CAC 40 in Paris, it should open practically unchanged according to the first indications available.
The Parisian market gained 2.4% in the first five sessions of the month, particularly on the basis of the hope of a gradual easing of health policy in China that could help the growth of economic activity.
But the evolution of the epidemic in the People’s Republic does not immediately point in this direction, since the number of cases of COVID-19 is growing sharply in Guangzhou, a large industrial center in the south of the country, as in other countries. big cities according to the latest official data.
Investors, in Europe as well as in the United States, are also awaiting the outcome of the American mid-term elections, which should allow Republicans to regain a majority in the House of Representatives while the outcome in the Senate is more uncertain.
The results promise to be tightened in several states and it may take several days to know the final results nationwide.
A Republican victory could boost stocks because it would prevent the Biden administration from pushing through potential fiscal stimuli and tax hikes, analysts say.
Uncertainty about the composition of the Senate should therefore encourage caution, as well as the expectation of US consumer price data in October, which will be released on Wednesday.
In Europe, the morning will be enlivened by monthly euro-zone retail sales figures but also by the expected presentations of the new Renault strategy and that of Carrefour.
A WALL STREET
The New York Stock Exchange closed higher on Monday, extending the recovery stemming from the US employment report late last week ahead of the mid-term elections.
The Dow Jones Index gained 1.31%, or 423.78 points, to 32,827.00, the Standard & Poor’s 500 gained 0.96% (36.25 points) to 3,806.90, and the Nasdaq Composite went from 89.27 points (+ 0.85%) to 10,564.52.
The increase was driven in particular by the energy (+ 1.73%) and high technology (+ 1.64%) sectors. Microsoft and Alphabet were up 2.93% and 2.21% respectively, while Meta Platforms gained 6.53% after press reports suggest a layoff plan covering several thousand jobs.
Also noteworthy is the 66.5% surge of Digital World Acquisition, the company that will merge with Trump Media & Technology Group, driven by the increasingly clear perspective of Donald Trump’s candidacy for the 2024 presidency.
Futures contracts on the main indices suggest an almost stable opening for the moment.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei Index closed 1.25% higher, its highest since Sept. 15, as Wall Street’s sharply higher close prompted investors to return to tech stocks.
In China, on the other hand, the Shanghai SSE Composite lost 0.87% and the CSI 300 1.28%, the latest news of the COVID-19 epidemic that encourages profit-taking after the strong rally in sessions. previous. In Hong Kong, the Hang Seng, which had gained 13% since October 31, fell 0.9%.
CHANGES
The dollar, after two sessions of marked decline, recovered ground against other currencies (+ 0.22%).
The Chinese yuan, which had retained most of its gains on Friday from speculations on Beijing’s health policy, fell to 7.245 per dollar.
The euro, for its part, returned to 1.0003 (-0.16%) after falling below par in early trading.
RATE IT
US Treasury yields are stable in Asian trade and therefore maintain the strong rally recorded on Monday, which took the 10-year to 4.214% and the two-year to 4.726%.
OIL
The oil market, which had reached its highest level since August on Monday, fell again, recovered from fears of recession and the resurgence in the number of COVID-19 cases in China, coupled with the beginning of the rebound of the dollar.
Brent lost 0.42% to $ 97.51 a barrel and US light crude (West Texas Intermediate, WTI) by 0.52% to $ 91.31.
(Written by Marc Angrand, edited by Matthieu Protard)
