Market: Stocks recede in a tense climate, sterling sinks

by Patrick Vignal

PARIS (Reuters) – Most European stock markets retreat Tuesday early in a market context tense by the commercial hostilities between Beijing and Washington and the friction around the Brexit, weighing on the euro and especially the pound sterling, fell at a low of nearly three years against the dollar.

In Paris, the CAC 40 index lost 0.58% to 5.461.26 points around 07:55 GMT. In Frankfurt, the Dax yielded 0.62% and in London, the FTSE (+ 0.04%) resisted, the misfortunes of the British currency favoring its export values.

The EuroStoxx 50 index of the euro zone drops 0.51%, the FTSEurofirst 300 0.37% and the Stoxx 600 0.56%.

The United States and China began Sunday morning to levy new customs duties on their mutual imports, marking a new escalation in the trade dispute between them for a year and a half. Donald Trump, however, assured that a meeting between the delegations of the two countries was still scheduled in September.

China announced Monday that it has lodged a complaint against the United States with the World Trade Organization (WTO) about the new customs barriers erected by the Trump administration.

Wall Street, which was closed Monday for Labor Day, will react to these developments, the futures on the benchmarks signaling for the moment an opening down from 0.8% to 1%.

On the Brexit front, British Prime Minister Boris Johnson will demand that early elections be held on October 14 if parliament forbids him to leave the European Union without agreement, a source said Monday evening. high level government.

Labor opposition and several rebels of the Conservative Party are preparing to defend Tuesday a parliamentary initiative that would allow them to prevent a Brexit without agreement on October 31.

"Rumors are becoming more insistent about early elections across the Channel but, in the immediate future, even if this scenario would come to fruition, it is difficult to identify the winner," write analysts of Saxo Bank, who note that the impact is mostly felt on sterling.

VALUES

On the European stock market, all sector indices are in the red early in the session. In Paris, luxury stocks suffer with declines of 2.17% for Kering and 1.32% for LVMH.

To note again, the decline of 2.21% for Iliad, which announced to have lost 127,000 subscribers in France in the first half.

Sanofi (+ 0.8%) is one of the rare values ​​to keep its head out of the water, driven by a note from Bernstein, who begins his follow-up on the value with a recommendation to "outperform".

IN ASIA

The Tokyo Stock Exchange ended almost unchanged (+ 0.02%) and the MSCI index aggregating the values ​​of Asia and the Pacific (excluding Japan) yields 0.3%.

RATE

On the bond market, yields on government bonds are still falling. That of 10-year Treasuries loses four points base at 1.147% and the German Bund of the same maturity, reference rate of the euro area, following the movement to decline to -0.74%.

EXCHANGE

The pound loses 0.8% against the dollar, to 1.1967, the lowest since the "flash crash" of October 2016. Except this extreme movement, marked by a brief fall to 1.1491, the British currency is at its lowest since 1985.

The greenback gained 0.4% against a benchmark and the euro fell further, around 1.0938 dollar.

OIL

The reference contracts on oil deepen their losses. The Texan Light Crude (WTI) contract drops 0.6% to 54.49 dollars a barrel but North Sea Brent loses more than 1%, around 58.32 dollars.

(Edited by Marc Joanny)

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