The Cac 40 driven by discussions between Russia and Ukraine and the decline in oil prices, Market news

The Paris Stock Exchange starts the week higher, as the drop in oil prices and the announcement of new talks between Russia and Ukraine rekindle appetite for risky assets after the shutdown last week. Investors are nonetheless on their guard against the containment of the city of Shanghai and the fears it arouses in terms of the risk of a slowdown in activity.

Mid-session, the 40 increased by 1.50% to 6,652.18 points in a business volume of 800 million euros. The contracts futures contracts June on American indices oscillate between the balance for the Dow Jones and a decline of 0.3% for the Nasdaq 100.

Zelensky ready for concessions

Russian and Ukrainian negotiators are due to start a new round of talks in Istanbul on Monday, according to a senior Turkish official. The Kremlin has confirmed talks will be held this week, but warned they are unlikely to start today. Moscow has announced that it is now focusing on Donbass and Crimea, which it already partially controls. Volodymyr Zelensky said he was studying Russia’s demand for Ukraine’s neutrality as part of a peace agreement with Russia and said he was aware that trying to force Moscow into a full withdrawal from Ukraine could lead to a third world War.

Joe Biden’s statements on a removal from power of Vladimir Putin, which he called ” Butcher “, aroused strong reactions in the Western camp, forcing the American president to clarify that he was not seeking to bring about a change of regime in Moscow. A controversy that Russia has not failed to exploit by recalling that it is up to the Russian people to choose their leaders.

On the bond market, the yield on the 10-year US bond rose above the 2.5% mark, a level considered a technical ceiling since the end of the 1980s. 5-year and 10-year bonds reversed for the first time since 2006, fueling fears of a misstep by the US Federal Reserve in normalizing its monetary policy.

Weakness in bond markets weighed on European markets last week amid soaring yields. However, more and more managers believe that equity indices have priced in the change in bond market perception and now believe that the US economy is strong enough to withstand the shock of rate hikes.

Two-step containment in Shanghai

In China, the surge in contamination with the Omicron variant prompted the authorities to decree a two-step containment of the city of Shanghai as part of their zero Covid policy. The 25 million inhabitants of the megalopolis will have to be tested and stay at home in two successive waves until April 8. People residing east of the Huangpu River will be the first concerned from this Monday until April 1, those located on the other bank will follow from this date. Businesses will be closed. These new restrictions raise fears of a slowdown in activity, which weighs on oil prices. The barrel of Brent from the North Sea fell 3.6% to 113.18 dollars three days before an OPEC+ meeting.

The market will also pay attention this week to US income and household statistics, and in particular to the PCE component of consumer spending, the measure of inflation most closely monitored by the Fed. Also to follow is the latest GDP estimate for the fourth quarter, as well as the March employment report.

Banks headline, STMicro retreats

Bank stocks rise as spreads widen in Europe. The yield of the 10-year OAT rose above 1% for the first time since 2017. BNP Paribas, Agricultural credit and Societe Generale earn around 3%.

Among other cyclical values, Saint Gobain and Schneider-Electric appreciate by around 2%. On his side, Renault goes up 2.5%.

TotalEnergies garners 1.2% and Engie 2%. France plans, in particular with the oil group and GRTGaz, a subsidiary of the energy company, to install a new liquefied natural gas import terminal in the port of Le Havre, reports the daily. The echoes citing sources familiar with the matter.

Conversely, Thales lost 1.5% under the effect of profit taking.

Bouygues loses 1.1%. Morgan Stanley downgraded the stock from “overweight” to “line weight”.

STMicroelectronics drop of 0.8% following information from the daily Nikkei that Apple is considering cutting production of iPhones and Airpods due to uncertainties over the war in Ukraine. In New York, Apple fell 2% in pre-market trading.

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