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Western stock markets hesitate, oil plunges

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(Paris) Western stock markets continued to struggle with a lot of conflicting information on Monday, from Ukraine to new US Federal Reserve policy, as oil prices fell sharply.

European markets, shaken by the war in Ukraine for nearly twenty days, ended the session up sharply, from Frankfurt (+ 2.21%) to London (+ 0.53%), via Paris (+1.75%) and Milan (+1.67%).

After an opening in the green, Wall Street went back into the red: the Dow Jones fell 0.13%, the S&P 500 lost 0.87% and the NASDAQ technology index even fell 2.14% around 1:40 p.m.

The sector is weighed down by the fall of nearly 5% of the Hong Kong Stock Exchange, the financial center of Chinese flagship technology stocks. After the announcement of the confinement of Shenzhen, the technological center of the country, it returned to its lowest since mid-2016.

Technology stocks are also generally more affected by rising bond market rates. However, rates on ten-year Treasury bills rose to 2.12%, their highest since July 2019, on the eve of the start of the US Federal Reserve meeting.

A new session of talks between Russian and Ukrainian officials began on Monday, even if the conflict has spread in recent days to western Ukraine, on the doorstep of NATO member countries.

“While there has been no de-escalation in Ukraine, there is hope that talks between the two sides could lead to a ceasefire. It may be premature, even erroneous,” nuanced Craig Erlam, an analyst at Oanda.

Oil ebb and the Fed in sight

The negotiations were driving oil prices down sharply. Around 1:30 p.m., a barrel of Brent from the North Sea for delivery in May fell 5.40% to 106.59 dollars.

A barrel of West Texas Intermediate (WTI) for April delivery sank 5.99% to $102.79, after briefly dropping below $100.

In the wake of oil, shares in the energy sector lost ground, such as Exxon Mobil (-2.84%) or Chevron (-2.46%).

In this uncertain context, the US Federal Reserve is holding its monetary policy committee meeting on Tuesday and Wednesday. An increase in key rates of 0.25 percentage point is expected in order to fight inflation, even if the consequences of the war in Ukraine encourage the institution to be more cautious.

Apple supplier Foxconn suspends operations in Shenzhen

Taiwanese electronics giant Foxconn, Apple’s main supplier (-2.50%), announced that it was suspending its activities in the Chinese technology center of Shenzhen, confined by the government.

The entire semiconductor sector suffered, such as Nvidia (-3.75%), AMD (-2.47%) on Wall Street or STMicroelectronics (-1.09%), one of the few values ​​in decline in Paris.

Volkswagen leads the automotive sector

The German car giant Volkswagen (+4.38%) announced a strong increase in 2021 results on Friday evening, defying the drop in sales due to the shortage of chips, and expects stable profitability in 2022 subject to of the uncertain economic impact of the war in Ukraine. Its Porsche subsidiary also climbed nearly 5%.

BMW gained 2.78% and tire maker Continental 2.64%. Elsewhere in Europe, Stellantis took 3.90%.

Bank stocks benefit from rising interest rates

The rise in rates on the bond market before the Fed meeting benefited banking stocks in all European markets, such as Barclays (+5.52%), Deutsche Bank (+7.98%) BNP Paribas (+4.04 %) or even BMPS (+6.78%).

On Wall Street, Visa took 1.92%.

On the side of the euro and bitcoin

At around 1:35 p.m., the euro was trading at $1.0971, up 0.54% from Friday’s close.

Bitcoin fell slightly (-0.05%) to $38,670.



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