Further monetary easing from the Central Bank of China allowed Asian stock markets to settle in the green on Thursday, but European markets remained dominated by caution.
In Asia, the indices rebounded strongly after a Wednesday in the red: the Hong Kong Stock Exchange soared 3.42%, Tokyo ended up 1.11%. Shanghai, on the other hand, lost 0.09%. European markets were moving around equilibrium in early trading in Milan (+0.30%), Frankfurt (-0.12%) and London (-0.10%), but Paris fell 0.35%. On Wednesday, the New York Stock Exchange again ended sharply lower. The Nasdaq technology index is now 10% lower than its record high reached at the end of November. China’s central bank lowered one of its benchmark interest rates, theloan prime rate(LPR) to one year to reduce borrowing costs in the market. Beijing had already revised downwards in December the mandatory reserve rate for banks, that is to say the share of deposits they are required to keep in their coffers. The Chinese economy is indeed under pressure from the real estate sector and strict health restrictions, due to the zero-Covid policy, which is weighing on activity.
On the bond market, whose significant rise in recent weeks has penalized equities, European sovereign rates remained stable, with the 10-year German Bund remaining narrowly negative (-0.02%). It made a foray into positive territory on Wednesday for the first time since May 2019. Rates have been rising in recent weeks as inflation pressure pushes central banks in western economies to cut monetary support, and plan a series of increases in their key rate, in particular for the US Federal Reserve. Fighting inflation will requirea long-term effort“, conceded Wednesday the American president Joe Biden, who made this axis a priority. “Until then, it will be painful for many people“, he acknowledged. In this context, “strong earnings are the only hope for near-term bulls», Estimates Ipek Ozkardeskaya, analyst of Swissquote. In the United States, Netflix opens the ball with earnings releases from big names in the technology sector.
As for Chinese real estate, the sector, crumbling under debt, welcomed the new measures of the Chinese central bank with relief: Evergrande took 4.65%, Country Garden 4.35%, while Kaisa shares jumped 13.3%. In Japan, Sony shares rebounded 5.84% to 13,135 yen, after plummeting nearly 13% the day before, in the wake of the announcement of the takeover by its competitor in the video game publisher Microsoft. Activision Blizzard. For its part, the British meal and food delivery platform Deliveroo published figures on Thursday indicating a sharp increase in performance for its 2021 financial year, despite the reopening of restaurants with the lifting of health measures linked to Covid-19. The action took 3.44% to 175.43 pence.
In Germany, Puma (+0.61% to 94.94 euros) also satisfied investors with a 14% increase in sales in the fourth quarter. As for oil, after four sessions of increases, oil prices were blowing a little. The barrel of Brent from the North Sea for delivery in March fell 0.70% to 87.81 dollars, while the barrel of West Texas Intermediate (WTI) with maturity in February, of which it is the last trading day, fell 0.32% to 86.68 dollars. The euro was trading at $1.1353 (+0.10%) and bitcoin was up 0.55% at $41,955.