Markets avoided taking risks on Friday amid growing concern about the global economic impact of Russia’s invasion of Ukraine and local restrictions in China.
Caution prevailed in the Old Continent after a sharp fall: Bourse scored 0.20%, Frankfurt Stock Exchange 0.09% and London Stock Exchange 0.28% on the back of volatility an hour after the open. Bel 20 Brussels Stock Exchange showed +0.53% to 4180.97 points around 11:00 (9:00 GMT).
Asia ended in the red in Tokyo (-0.56%), Hong Kong (-0.2%) and Shanghai (-0.9%). Economic news is not encouraging: China’s manufacturing activity fell to its lowest level in two years in March due to Covid-19 measures.
According to the Bank of Japan, the confidence of large Japanese manufacturing companies fell again compared to the last quarter of 2021.
Investors experienced a first quarter marred by central banks’ push to accelerate the normalization of monetary conditions despite economic uncertainty, followed by the Russian invasion of Ukraine and the reconfiguration of tens of millions of Chinese, especially in the country’s northeast.
Second quarter 2022 “will start as confusing as the first quarter ended, with markets facing a mass of headwinds and no vision of the future”, says Jeffrey Halley, an analyst at Oanda. Besides, “poker around Russian gas continues”Juergen Molnar, an analyst at RoboMarkets, notes for his part.
If Russia closes the gas valve, it may “plunge the German economy into the worst crisis since the end of World War II.”warned Martin Brudermüller, CEO of chemical giant BASF (+0.87%), at the Frankfurter Allgemeine Zeitung.
“No matter how long the war in Ukraine continues, international sanctions against Russia, disruptions caused by the Covid-19 epidemic in China, growth will remain limited and inflation will be high”says Christian Parisot, economic adviser to Aurel BGC.
Thus, in this first session in April, investors will be paying close attention to March inflation in the eurozone and the monthly US jobs report. The solid numbers should support market expectations for an accelerated normalization of monetary conditions in an attempt to curb inflation.
The sovereign debt market, which had a very poor first quarter, was tight, with US 10-year bond yields up 10 basis points to 2.43% around 0820 GMT, not far from the two-year rate.
Oil retreats, WTI below $100
Crude oil prices continued to fall following the decision by the United States to use one million barrels a day of strategic black gold reserves for six months to boost oil supplies, a gesture to households suffering from price spikes.
A barrel of Brent oil from the North Sea for delivery in June, that is, the first day of use, fell 1.33% to $103.33.
A barrel of West Texas Intermediate (WTI) fell 1.65% to $98.63.
The euro stabilized against the dollar, climbing 0.07% to $1.074 around 0820 GMT.
33 titles suspended in Hong Kong
Shares of more than 30 companies, including at least two major Chinese property developers, Shimao Group and Sunac China, were halted on Friday in Hong Kong after they failed to report their full-year results.
Euroapi, a subsidiary of Sanofi, on the stock market in early May
Sanofi (+1.01% to €93.44) announced on Friday that its Active Pharmaceutical Ingredients subsidiary Euroapi will list on the Paris Stock Exchange on May 6, subject to approval by the Autorité des Marchés financiers (AMF). The Group confirms that it plans to retain 30% of the capital and voting rights of this subsidiary and place 58% on the stock market. Thus, the remaining 12% must be owned by the state, even if it is not direct participation.