Heavy losses ended Friday’s European session, a day after US Federal Reserve Chairman Jerome Powell said a 50-point Fed rate hike would be “on the table” at the May meeting.
On the board, the pan-European index Stoxx 600 It closed with a fall of 1.79%, at 453.30 points, with the shares of the mining sector leading the losses, with 3.6%, with all the sectors recording losses. The other pan-European index, Eurostoxx 50“lost” 2.24%, to 3,840.01 points.
The German DAX fell by 2.48%, to 14,142.09 points, with the French CAC 40 to “lose” 1.99%, to 6,581.42 points and the British FTSE 100 to record losses of 1.39%, at 7,521.68 points.
In the periphery, the Italian FTSE MIB lost 2.12%, to 24,279.63 points, while the Spanish IBEX 35 1.84%, at 8,652.30 points.
The losses in Europe followed a negative shift in the investment climate on Thursday on Wall Street, following the increase in US government bond yields and Powell’s statements, which marked the beginning of a faster and more intense tightening of monetary policy.
“Markets are forced to assume a much stronger and faster monetary tightening rate than they expected a week, a month or three months earlier. So I think we will see an adjustment,” said Daniel Morris, BNP Paribas Asset, head of market strategy. Management.
“I think the question that will determine the direction of the markets is: When will this process stop? When will we have fully priced where interest rates will be in a year from today? When that will happen, probably soon, then we will also have the real stabilization of the markets “.
In the field of individual shares, that of B&M sank by 6% after the announcement that its CEO will leave in 2023. Data from the United Kingdom also showed that sales volumes in retail trade fell more than expected in March. .
Shares of French luxury goods company Kering also fell more than 4% amid concerns about its sales in China, where a “zero Covid” policy worries investors.
On Sunday, French voters went to the polls to elect the head of state, with opponents in the second round of the process being centrist Emanuel Macron and far-right Marin Le Pen.
The markets are hoping for a victory for the European candidate, while they estimate that a victory of M. Lepen would lead to an institutional crisis, since in the parliamentary elections in June, the far right would be unlikely to win a parliamentary majority, so there would be cohabitation of “opponents” in Presidency and Prime Minister of France respectively.