European Shares Rebound from March 2021 Dips
European shares have returned to their lowest levels in more than a year; Investors bought the downturn after the global drop, which was caused by the tightening of the aggressive policy of the Central Bank, Against the background of stubbornly high inflation. The Stoxx Europe 600 Index rose 0.8% after falling to its lowest level since March 2021 on Monday. Banks and the technology sector have made progress.
The market is seeing a dead cat jump out of the short-term surplus level; However, concerns that central banks may not have soft access engineering means you probably haven’t seen it in the low to medium term.
The European benchmark was set this year, As Core Central Bank concerns and potential recession reduced demand for risky assets. However, stock valuations are much lower than their long-term average. Since last week the European Central Bank has shown a slightly more aggressive path; Than economists had predicted; The focus this week is on the Federal Reserve Policy Meeting; Bets are rising on the central bank given its most significant interest rate hike since 1994. Investors believe that blind central banks are the most significant risk for European stocks, followed by a global recession and inflation.
Shares and Inflation
The Wall Street S&P 500 Index confirmed Monday that it is in the bear market; Or fell 20% from a record high, with growing fears; That the expected aggressive rise in U.S. Federal Reserve rates will push the economy into recession. The focus was on the Fed’s policy decision, which was released on Wednesday. Many expect a significant three-quarter percentage point increase in interest rates following the release of hot inflation last week.
The risks of a recession caused by the Fed have increased; The chances of a recession increased over the next six months. Historically, in periods when inflation was above 3%, value sectors prevailed. Investors are struggling with record-high inflation in the eurozone, tightening financial conditions, and slowing down China’s economy. Oil and gas reserves increased by 0.7%. Due to global supply constraints, crude oil prices have risen to around $1 a barrel.
Among individual stocks, SAP rose 0.5% after Oracle released optimal quarterly results; This has helped increase demand for cloud products. Shares of Atos fell 18.7%; After the French IT company unveiled a plan to split its operations and sell its assets, which also went to the CEO. Akzo Nobel fell by 5%; After warning of operating income in China due to weakening demand for decorative paints in Europe.
Shanghai shares closed at a three-month high; The Hong Kong rallies remained unchanged on Tuesday; While U.S. stocks fell overnight amid fears of rising U.S. aggressive rates. Analysts expect China to grow by supporting more policies. The CSI300 index rose 0.8% to 4,222.31; The Shanghai Composite Index gained 1%, to a total of 3,288.91 points, after falling to 1.8%. The Hang Seng Index closed unchanged at 21,067.99. China Enterprises Index fell to 7,333.61 points.
Wall Street has reached the proven bear market stage; Goldman Sachs forecasts a 75-point interest rate hike; At the Federal Reserve policy meeting on Wednesday. According to experts, the performance of Chinese stocks will ultimately depend on expectations of domestic economic recovery.
Refinitiv data show 7.1 billion yuan in inflows north of the Stock Connect program. Financial stocks rose 2.7%; Banks by 1.5%; brokers by 4.8%; Real estate developers increased by 2%. Energy stocks rose 2.3%; Cars rose 3.3%. Alibaba shrank by 2.5%; Meituan by 3.3%. BOC Hong Kong Holdings led to profits from local banks; overall, it grew by 4.8% and became the most significant percentage miner in the Hang Seng Index.
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