European stock markets ended lower yesterday and Wall Street followed suit at mid-session, due to fears of recession and further containment in China.
The world’s stock markets saw all their indicators in the red. In Paris, the CAC 40 started the month of September down 1.48% to 6,034.31 points. The EuroStoxx 50 index fell by 1.72% and the FTSEurofirst 300 by 1.77%.
In Europe, all the main compartments of the Stoxx 600 ended in the red, whether raw materials (-3.81%) or the tourism and leisure sector (-3.77%) which show the largest declines. The mining groups Arcelor Mittal, Rio Tinto and Glencore gave up 3.42% to 6.61%, and Total Energies, BP and Eni fell back by 0.06% to 0.94%.
Wall Street, after four consecutive sessions of decline, saw red at the opening: the Dow Jones fell by 0.47%, the S&P 500 by 0.69% and the Nasdaq by 1%. The Tokyo Stock Exchange ended down 1.53% and in China, Shanghai gave up 0.54% and Hong Kong 1.79% after the lockdown in Chengdu.
This news “suggests a slowdown in demand for several assets in the world’s second largest economy,” said Pierre Veyret, analyst at Active Trade.
However, the main European stock markets are expected to rise this morning at the opening, in the wake of the rebound of the previous day of the Dow Jones and the S&P-500 and before the publication of the monthly report of the U.S. Department of Labor on employment, unemployment and wages at noon.
Decline of luxury giants
Chengdu, one of China’s largest cities, announced Thursday containment measures affecting 21.2 million residents, while in Shenzhen, the main hub of high-tech industries in southern China, authorities tightened health restrictions to combat a new rise in cases.
This is very bad news for the luxury goods industry, which is suffering from these confinements in China. Indeed, the country is a market where luxury companies make a significant part of their profits. As a result, Hermes fell by 2.53% to 1,250 euros, LVMH by 2.27% to 632.80 euros, Kering by 2.15% to 492.20 euros. The Pernod Ricard group, meanwhile, advanced 0.46% thanks to its better than expected annual results.
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Featured photo : © B for Bank
