Frankfurt, Dec 28 (Reuters) – Shortly before the start of the year, investors in Europe are only moving with the handbrake on. The flagship Dax index and the EuroStoxx50 each fell 0.3% on Wednesday to 13,956 and 3,823 points. “With the hope of a reopening of the Chinese economy and a subsequent rapid recovery comes the fear of longer and higher interest rates, which central banks will have to use to counter this recovery,” he said. said Jochen Stanzl, analyst at online brokerage CMC Markets. “The stock market should take this uncertainty with it into the new year.”
The wave of corona infections in China had previously put pressure on stock markets in the Far East. For the coming year, on the other hand, market participants expect a positive impulse from the abandonment of the zero-Covid policy in China. UBS Securities experts said the lifting of many restrictions should lead to a gradual increase in consumption from the end of the first quarter of next year or the beginning of the second quarter. They expected the first wave of infections to peak in mid-January and stabilize after the Spring Festival.
The Chinese special administrative region of Hong Kong is in the meantime lifting almost all corona protection measures. On Monday, China announced that travelers would no longer be quarantined from January 8. This had initially given a positive boost to the stock markets. Investors in Britain, who only returned from the Christmas long weekend on Wednesday, caught up on those price gains. Contrary to trend, Britain’s export-focused FTSE 100.FTSE index rose nearly 1% mid-week.
BOJ AND OIL IN THE SPOTLIGHT
Investors also sifted through the minutes of the Bank of Japan’s latest monetary policy meeting. According to the transcripts, rising prospects that higher wages could erase the risk of a return to deflation were discussed, according to Norihiro Fujito, investment strategist at Mitsubishi UFJ Morgan Stanley Securities. The monetary police surprised the markets a week ago with a surprising tightening of their interest rate policy. The prospect of higher interest rates had pushed yields and the yen higher.
The wave of infections following the easing of corona restrictions in China also left its mark on the crude oil market. North Sea variety Brent and US light oil WTI fell almost one percent cheaper at $83.84 and $79.14 a barrel. “Even after China eased Covid restrictions, demand is struggling to recover in a short time as people quickly curb outdoor activities due to the massive number of infections,” said Leon Li, analyst at CMC Markets.
However, a Russian decree banning oil exports from Russia to countries that imposed price caps under sanctions related to the war in Ukraine limited the losses.
In individual stocks, InfineonIFXGn.DE fell about one percent. CEO Jochen Hanebeck said in an interview with the Frankfurter Allgemeine Zeitung (FAZ) published on Wednesday that the chipmaker was looking for acquisitions and was ready to spend several billion euros on the right takeover target. According to the FAZ, the CEO did not want to comment on the individual takeover candidates.
European investors digest the timetable for the opening of Corona in China
Photo symbol: Image by Pexels on Pixabay
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