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MARKET REVIEW. A wind of optimism about inflation and central bank tightening blew through stock markets on Monday, but announcements from the G7 dampened their momentum.
After a bullish open, European stock markets were more mixed.
In Asia, Hong Kong benefited from the good performance of Chinese technology stocks and the injection of liquidity into the market by the People’s Bank of China. Shanghai and Tokyo also finished in the green.
On Friday, Wall Street had closed strongly, around 3% according to the indices. At around 7:55 am Quebec time, futures contracts for all three major indices pointed to a higher open.
Stock indices at 8:35 am
futures contracts dow jones it advanced 79.00 points (+0.25%) to 31,566.00 points. futures contracts S&P500 recorded an increase of 14.25 points (+0.36%) to 3,930.50 points. futures contracts nasdaq it advanced 56.75 points (+0.47%) to 12,197.25 points.
In London, the FTSE 100 it increased by 45.03 points (+0.62%) to 7,253.84 points. In Paris, the ACC 40 registered a decrease of 10.54 points (-0.17%) to 6,062.81 points. In Frankfurt, the DAX recorded an increase of 86.35 points (+0.66%) to 13,204.48 points.
In Asia, the Nikkei Tokyo rose 379.30 points (+1.43%) to 26,871.27 points. For his part, the Hang seng Hong Kong gained 510.46 points (+2.35%) to 22,229.52 points.
On the oil side, the price of a barrel of WTI American it rose $0.30 (+0.28%) to $107.92. the barrel of North Sea Brent it rose $0.56 (+0.50%) to $113.68.
“Friday’s rally had all the hallmarks of a bear market bounce and doesn’t inspire confidence that the bottom has finally been bottomed,” said Markets.com analyst Neil Wilson.
Investors had regained some optimism, believing that the latest economic data releases left room for central banks not to raise their rates too much.
“If this week’s inflation data indicates a slowdown, the market would begin to believe that the Federal Reserve has regained control of the situation”, explains Neil Wilson.
He adds that “the sooner the Fed regains control, the sooner the bullish cycle will end”, ensuring a better environment for the markets.
However, the G7 summit unsettled investors: the countries are considering a “mechanism to limit the price of Russian oil globally”, together they “will continue to restrict Russia’s access to crucial industrial resources”, especially in the oil sector. defense and want to “coordinate the use of customs tariffs on Russian goods to help Ukraine,” according to a senior White House official.
Oil prices hovered around equilibrium after these statements.
And gold rose 0.38% to $1,833.73 an ounce, after US President Joe Biden and British Prime Minister Boris Johnson announced an embargo on Russian gold imports.
This week, investors will follow the forum organized by the European Central Bank (ECB), where ECB President Christine Lagarde, Federal Reserve Chairman Jerome Powell and Bank of England Governor Andrew Bailey will speak.
“We might as well get some tasty items that would create short-term volatility,” Jeffrey Halley anticipates.
Also on the agenda for next week is the publication of activity indicators for China and the United States, and inflation for the euro zone and the United States.
Stocks in the technology sector continued to benefit, as they did last week, from the fall in bond interest rates, which allow them to finance their growth at a lower cost.
in Frankfurt, hello fresh rose 6.42%, zalando 5.85% and Infineon by 2.16%. In London, dark trail took 3.01% and Deliveroo 5.24%.
On Monday around 7:50 am, European sovereign debt yields rebounded around 10 basis points after losing 35 basis points last week.
The euro was up 0.12% at $1.0566 around 7:50 a.m.
The Turkish lira saw its biggest rally of the year on Monday, following the announcement of a new support measure forcing some banks to sell their foreign exchange reserves. The pound rose 2.23% against the dollar and traded at 16.56 pounds per dollar.
the bitcoin stabilized at US$ 21,310 (-0.36%).
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