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European stock markets want to believe in China’s reopening



(Paris) European stock markets rebounded sharply on Friday pending US employment, driven by market speculation about a potential easing of the zero-COVID-19 policy in China which has already caused the Hong Kong Stock Exchange to jump.

In New York, the futures contracts for the three main indices suggested a higher opening: +0.53% for the Dow Jones, +0.85% for the NASDAQ and for the S&P.

On the Old Continent, around 11:45 a.m., Paris was up sharply by 2.24%, while Frankfurt gained 1.74%, London 1.40% and Milan 1.01%.

In Asia, the flagship Nikkei index dropped 1.68% to 27,199.74 points, the day after a public holiday in Japan. Conversely, Hong Kong jumped 5.36% as investors believed in fresh rumors of a possible relaxation of China’s strict zero COVID-19 policy.

“So far speculation has been based only on rumors on social media, with China’s foreign ministry saying it is unaware,” said Victoria Scholar, an analyst at Interactive Investor.

China is the latest major economy to implement a rigorous anti-COVID-19 policy, which involves repeated lockdowns, testing the population several times a week and long quarantines.

According to analysts, the market is watching for the slightest sign of a relaxation of this policy in the face of speculation of relief which has been growing for a week, China being a significant market for the luxury sector.

Markets will also focus “on the official October jobs report later today, as well as the US Consumer Price Index report next week,” says Michael Hewson. , CMC Markets analyst.

The day before, investors unsurprisingly welcomed the interest rate hike of an additional 75 basis points from the US Central Bank (Fed) but their hopes of a lull were dashed, the Fed announcing that interest rates will be maintained at a higher level and for a longer period than expected.

“Unfortunately, the only thing that could lift investors’ spirits would be very poor indicators. As long as the US economy remains resilient, “the Fed will maintain a firm monetary policy to try to contain inflation, said Ipek Ozkardeskaya, analyst at Swissquote.

Regarding the official employment figures for October, analysts bet on the creation of 220,000 jobs against 263,000 in September and a slight increase in the unemployment rate to 3.6%.

Luxury, always more expensive

In the wake of a possible easing of the zero-COVID-19 policy in China, luxury sector stocks rose sharply in the markets around 7:45 a.m. EDT.

In Paris, Kering gained 5.43% to 495.70, LVMH 4.46% to 658.10 euros, Hermes 4.05% to 1351.50 euros and L’Oréal 3.64% to 311.95 euros. In Switzerland, Richemont took 6.04% to 103.60 euros.

Luxury groups listed in Milan were no exception: Moncler took 5.96% to 44.78 euros, Tod’s gained 3.15% to 32.06 euros. In London, Burberry gained 2.68% to 1,895.00 pence.

Miners are popular

Like the luxury sector, mining stocks pulled the London Stock Exchange, especially Anglo American (+8.72% to 2,888 pence) and Rio Tinto (+6.16% to 4,963 pence).

In Paris, ArcelorMittal took +6.02% to 23.41 euros at 7:40 a.m. EDT and Eramet 6.53% to 73.40 euros.

On the side of currencies and commodities

The euro gained 0.50% against the greenback at 0.9797 dollars. The pound gained 0.44% to $1.1209 around 7:35 a.m. EDT.

The barrel of Brent from the North Sea for January delivery climbed around 7:35 a.m. EDT by 3.22% to 97.71 dollars, that of American WTI for December delivery by 3.65% to 91.39 dollars.

The price of European natural gas fell by 4.16, to 120,225 euros per megawatt hour.

Bitcoin gained 1.84% to $20,610.

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