European stock markets lose almost 2% while awaiting the ECB meeting | Economy

View of the Madrid Stock Exchange.
View of the Madrid Stock Exchange.Altea Fabric (EFE)

The European stock markets are preparing to live another day of uncertainty, after the euphoria shot up on the stock markets the day before. Investors remain alert before the meeting of the European Central Bank, which will report on the new economic forecasts in a scenario of high inflation fueled by geopolitical risks. The evolution of the war is also in the spotlight, with an eye on the imminent meeting in Turkey between Russian Foreign Minister Serghei Lavrov and his Ukrainian counterpart Dmitry Kuleba. In the face of perplexities, prudence once again reveals itself to be the surest path.

The Ibex has dawned flat this Thursday, rising 0.05%, to then register slight falls a few minutes after opening. Within the Spanish selective, Acerinox and Inditex suffer the greatest decreases, while once again they are the renewables that occupy the best positions: Siemens Gamesa and Solaria advance by 2%. In the other European parks, the losses are more consistent: Frankfurt, Paris and Milan yield more than 1%. Wall Street futures are also dyed red, although for now the declines are mild. Brent oil, after collapsing almost 12% on Wednesday, rose slightly again, to 115 dollars per barrel, a figure far from the highs recorded last week.

Asian stocks have added to a rally in global markets, fueled by falling oil prices, partly allaying fears of persistent inflation and a global economic slowdown following Russia’s invasion of Ukraine. Tokyo’s Nikkei closed up almost 4%, its biggest daily rise since June 2020. Similarly, the Hong Kong benchmark index has recovered ground, after several days in the red, also due to the rebound in contagion of coronavirus.

With several days of uncertainty behind them, the indices have managed to escape the quicksand this Wednesday and have benefited from advances that they have not seen since the end of 2020. From Link Securities they assure that after the sharp falls of recent weeks, the rebound they have experienced the markets is because many stocks and indices were severely oversold. It has been, therefore, a session of technical corrections. In addition, the optimism about the meetings to be held this Thursday by the leaders of the EU and the ECB has also conditioned the movements of investors. On the one hand, a possible new package of stimulus measures will be discussed at the European summit to mitigate increased spending on defense and energy. On the other hand, the main European monetary authority could signal a possible delay in the process of withdrawing stimuli.

Since the beginning of the conflict, the soaring costs of raw materials – gas, oil and grain, among others – have revived the concern among investors about a more lasting inflation than expected, which would force central banks to raise interest rates. interest. If the forecasts point to the Federal Reserve opting for a rise of 25 points next week, on the part of the ECB the stock market operators expect more prudence.

Although no change is planned with respect to rates, the focus of attention will be the press conference by the president of the institution, Christine Lagarde, who will give guidelines on how to deal with the economic effects of the war. “You will have to tread very finely in your speech, to the extent that it is necessary to maintain credibility with respect to inflation control, but also safeguard financial stability and support economic growth that is clearly at risk,” warn analysts at Renta 4. The markets will also focus their attention on the summit of European Union leaders, who, after the veto of the United States and the United Kingdom to Russian oil, seek to reduce their dependence on Russian energy sources.

He knows in depth all the sides of the coin.


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