Market: Europe expected to rise, China in support

by Laetitia Volga

PARIS (Reuters) – Major European stock markets are expected to rise on Tuesday after a long Christmas holiday weekend, with the announcement of further easing of anti-COVID health restrictions in China restoring the appeal of risky assets.

The first indications available indicate a rise of 0.64% for the Parisian CAC 40 and for the Dax in Frankfurt and of 0.81% for the EuroStoxx 50.

The London Stock Exchange is closed, as are Hong Kong and Sydney.

The latest news from Beijing has reassured investors since the Chinese authorities decided to lift the mandatory anti-COVID-19 quarantine from January 8 for everyone entering its territory.

The disease has also been downgraded to category B, such as anthrax or AIDS, whereas until now it was treated according to a category A protocol, such as cholera and bubonic plague.

“There does not appear to be a slowdown in the pace of easing COVID restrictions despite the increase in the number of cases,” said Christopher Wong, strategist at OCBC. “This perhaps demonstrates the will of the decision-makers for a total reopening”.

“Additionally, reports have circulated that Beijing may take extraordinary steps to support growth,” he added.

JPMorgan analysts expect a shorter-than-expected difficult period with a sustained above-trend economic recovery starting in the second quarter.

IN ASIA

Mainland China’s broad CSI 300 index rises 1.03%, Shanghai’s SSE Composite 0.84%

In Tokyo, the Nikkei rose 0.16 per cent.

BY WALL STREET

The New York Stock Exchange ended Friday in low volume: 7.75 billion shares changed hands versus 11.41 billion on average over the past 20 sessions.

Investors noted the slowdown, largely in line with expectations, in the PCE price index, which should not, however, deter the Federal Reserve from raising interest rates next year.

The Dow Jones industrial average rose 0.53% to 33,203.93 points, the S&P-500 gained 0.59% to 3,844.82 points and the Nasdaq Composite gained 0.21% to 10,497.86 points.

The energy sector (+3.16%) was the strongest gainer as oil prices benefited from Moscow’s announcement of a plan to cut its output.

Futures are currently signaling a 0.46% to 0.72% open.

CHANGES

The dollar fell amid renewed risk appetite: The index, which measures its volatility against a basket of benchmark currencies, lost 0.35%.

The euro, on the other hand, rose 0.16% to $1.0652.

RATE

In US bond markets, the 10-year yield is steady at 3.7452% after jumping on Friday to more than 3.75%, the highest since late November, on the prospect of the Fed continuing to raise rates in its fight against inflationary pressures.

OIL

Chinese health policy developments and the risk of continued US production disruptions after the winter storm provide support for oil: Brent rises 0.89% to $84.67 a barrel. barrel, and US light crude (West Texas Intermediate, WTI) gained 0.87% to $80.25.

(Laetitia Volga, Editing by Matthieu Protard)

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