The announcement by the United States to draw more on its strategic reserves weighed on oil prices and the energy sector in Europe. Equity markets end down.
The last session of March and of the quarter ended with a general decline in equity markets. The fall in oil prices following the announcement by the United States to draw again on its strategic reserves no longer offered support to the stock market indices as in previous sessions.
Investors continued to worry as the day before the lack of concrete progress in the talks between Russia and Ukraine. Moscow’s announcement to demand payment for gas in rubles from Friday did not help change its mind. The acceleration of inflation in the United States, with a rise in consumer prices over one year of 6.4% according to the PCE inflation indicator, favored by the American Federal Reserve, also weighed on morale. equity markets.
“Bond yield curve talks salient again. Investors worried about sound warnings of recession.”
Investors are also wondering about a possible recession as the bond yield curve inverted. The US 2-year rate briefly rose above the 10-year rate last Tuesday, but that was enough to trigger some concerns, as the bond yield curve was right on its last six inversions. “Discussions on the bond yield curve are again salient. Investors are worried about the sound warnings of recession” observes Craig Erlam, analyst at Oanda.
The Stoxx 600 lost 0.94%. The Dax dropped 1.31%, the CAC 40 1.21% and the FTSE 100 0.83%. The Bel 20 fell 0.96%, weighed down by Galapagos (-3.46%) and Solvay (-3.85%).
The energy sector fell
The energy sector continued to decline by 0.42%, still affected by the drop in oil prices. the Brent barrel fell 4.59% to 108.24 USD following the announcement of new measures by the United States to lower the price of black gold. The country will draw 1 million barrels a day from its reserves, an unprecedented decision according to the White House. “This is a recourse to stocks and not a sustainable source of supply for years to come.
Such a measure would therefore not solve the structural supply deficit, which has been going on for years.” Goldman Sachs analysts have judged that the renewed American recourse to strategic oil reserves will not stem the rise in crude oil prices. in a sustainable way.
Within the sector, TotalEnergies lost 1.99%. BP gave up 1.93% but Shell took 0.32%. However, the sub-fund no longer posted the strongest decline in the Stoxx 600 as in previous sessions. The retail sector took last place, with a decline of 4.93%, affected by the slap on the action H&M (-12.91%) after disappointing results.
“The sector needs to stem higher costs from inflationary pressures. Even though its direct exposure to Russia is low on average, other mechanisms like the impact of sanctions could negatively impact the performance of European banks.”
“Stemming higher costs”
The banking sector (-2.05%) also found itself at the bottom of the performance of the Stoxx 600 on Thursday, with a decline of 5.49% for Commerzbankof 3.47% for Societe Generale. Chris Hallam, an analyst at Goldman Sachs, points out that the compartment is torn between, on the one hand, a rise in bond rates, which is favorable to it, and, on the other, a credit risk.
“The sector needs to stem higher costs from inflationary pressures. Even though its direct exposure to Russia is low on average, other mechanisms like the impact of sanctions could have a negative impact on the performance of European banks.”
Only two sectors managed to finish up on Thursday. Utilities (+0.4%) took the lead. Insurance (+0.09%) benefited from rumors of mergers and acquisitions around the Italian company General (+3.23%).