(Reuters) – European stocks ended slightly lower on Monday as optimism sparked over the weekend by an agreement in principle on the U.S. debt ceiling gradually faded in the session.
In Paris, the CAC 40, which had risen 0.5% at the start of the day, ended down 0.21% at 7,303.81 points, while Germany’s Dax lost 0.2%.
The EuroStoxx 50 index and the Stoxx 600 both fell 0.11%.
In Madrid, the Ibex index fell 0.12% as Socialist Prime Minister Pedro Sanchez announced the holding of early legislative elections in July, while the left suffered major setbacks in regional elections on Sunday.
However, the session was quiet due to the closure of the markets in the UK for ‘Spring Bank Holiday’ and in the US for ‘Memorial Day’.
In New York, index futures rose by 0.34% for the Dow Jones, 0.31% for the Standard & Poor’s-500 and 0.35% for the Nasdaq.
US President Joe Biden and the Speaker of the House of Representatives, Kevin McCarthy, reached an agreement in principle over the weekend to temporarily suspend the federal government’s debt ceiling.
However, this compromise, which has yet to be approved by both chambers of a divided Congress, should provide only short-term relief as inflation concerns and the Federal Reserve (Fed) persist.
Data released on Friday showing an acceleration in PCE inflation – the Fed’s key indicator of rising prices – fueled concerns and speculation that the US central bank will keep interest rates high longer than expected.
Swedish property group SBB gained 2.62% after announcing an extension of its ongoing strategic review, including a potential sale of the company, business segments or assets.
Spanish bank BBVA, meanwhile, fell 1.2% after the unexpected announcement of early elections in Spain and the new election victory of Recep Tayyip Erdogan in Turkey.
In Paris, the Orpea group fell 2.5% as it announced on Friday that the Financial Markets Authority (AMF) granted dispensation to the group led by Caisse des dépôts (CDC) with MACSF, CNP Assurances and Maif to acquire more than 30% of the company’s capital without having to make a takeover bid.
The euro fell slightly against the greenback to trade at 1.0712, while the greenback was largely unchanged (+0.05%) against a basket of benchmark currencies
In Turkey, the lira fell to a record low of 20.10 against the dollar on Monday after the election victory of Recep Tayyip Erdogan, who won a new five-year presidential term.
“An Erdogan victory brings no comfort to foreign investors,” said Hasnain Malik, head of equity research at Tellimer.
In the bond market, European government bond yields fell sharply after the deal on the US debt ceiling, although investors remain cautious ahead of Thursday’s first inflation estimate for the euro zone in May.
The benchmark ten-year German benchmark rate fell 10 basis points to 2.43%.
“While we are more confident that the peak in core (eurozone) goods inflation is behind us, we now expect a slower slowdown from there,” Ruben Segura-Cayuela said in a note. , European economist at BofA.
In the oil market, prices also retreated, with concerns over interest rates and reduced energy demand outweighing the US debt ceiling deal.
Brent LCOc1 fell 0.43% to $76.62 a barrel. barrel and US crude (West Texas Intermediate, WTI) CLc1 0.19% to $72.53.
(Writing by Diana Mandiá, Editing by Jean Terzian)
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