Frankfurt (Reuters) – Europe’s stock investors see the interest rate peak in the USA becoming more distant again and cashed in at the end of the week.
Dax and EuroStoxx50 each lost around 0.6 percent to 15,257 and 4201 points respectively by Friday afternoon. US futures stood still before the trading session. Interest rate increases are still an option for US Federal Reserve Chairman Jerome Powell despite the easing price pressure. The Fed chief said that the monetary authorities were “not convinced” that the interest rate level was sufficiently restrictive to combat inflation. Investors hoping for an end to the interest rate hikes have once again been torn from their dream, said capital market expert Jürgen Molnar from the broker Robomarkets. “So now it’s back again, the dangerous mix of monetary policy uncertainty, weakening economies and geopolitical risks.”
According to its president, the ECB is seeing its tightening policy Christine Lagarde on course towards the inflation target. The dollar index and the euro were little changed at 105.81 points and $1.0682, respectively. Prices on the bond markets plummeted, while yields rose in return. The trend-setting ten-year German bond temporarily yielded 2.742 percent after 2.654 percent in the closing business on Thursday.
MIDDLE EAST WAR CAUSES OIL PRICE TO RISE
Supply fears due to the Middle East war drove up oil prices. The price of North Sea oil Brent and US oil WTI each rose by more than one percent to $80.93 and $76.56 per barrel, respectively. Iran warned on Friday of an expansion of the Gaza war. The Israeli army has moved into the north of the Gaza Strip and is fighting there with the radical Islamic group Hamas after its attack on Israel more than a month ago. Interest rate and economic concerns were affecting the price of copper. The industrial metal fell by one percent to a two-week low of $8,063 per ton.
RICHEMONT DUMMERS MOOD IN THE LUXURY SECTOR
The luxury goods sector came under pressure on the stock market. Richemont fell by more than six percent. The Cartier manufacturer’s sales grew significantly more slowly than in the previous quarter, as inflation, economic slowdown and geopolitical tensions dampened customers’ purchasing mood. In the first half of the year, the Swiss earned significantly less than analysts expected. Papers from LVMH, Kering and Hermes lost between 1.4 and 3.3 percent.
In the Dax, Allianz gained 1.7 percent despite a decline in profits. The adjusted profit for the period fell by 29.3 percent to 2.1 billion euros in the past quarter and therefore not as much as feared.
Jungheinrich fell under the radar in the MDax. Weaker growth in order intake and sales pushed the forklift manufacturer’s shares down 6.7 percent. On the London Stock Exchange, falling demand for alcoholic beverages in Latin America hit Johnnie Walker manufacturer Diageo. The shares plummeted by around 14 percent.
(Report by Anika Ross and Daniela Pegna. Edited by Ralf Bode. If you have any questions, please contact our editorial team at [email protected] (for politics and economics) or [email protected] (for companies and markets ).)