MILAN – Weak opening in Europe and red futures for Wall Street, which returns to activity after President’s Day. Trading in Asia was also marked by weakness, with investors worried about the possibility that central banks will hold rates higher than expected to fight inflation. Against this backdrop, the dollar strengthened. This scenario, which is also weighed down by geopolitical uncertainty one year after the Russian invasion of Ukraine, risks playing against the equity sector, which has returned from a rocket start in 2023. Not even the data on the composite PMI from the ‘Eurozone, which rose more than expected and reached a nine-month high.
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The Eurozone composite PMI is doing well
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The Japanese PMI is bad, Tokyo closes down
The stock exchanges worsen after the SMEs, there are fears of a more aggressive ECB
European stock exchanges widen declines after release of PMI data. Thanks to the improved economic performance of the services sector and the return to growth in manufacturing output, eurozone activity growth accelerated to its highest level in nine months in February. Investors are considering very concretely the possibility that central banks will keep interest rates higher for longer to curb inflation, also in light of signs of recovery in the economy. London loses 0.54%, Frankfurt the Dax loses 0.95% and Paris 0.96%. Piazza Affari also worsens, with the Ftse Mib index marking -1.37%.
The Eurozone composite PMI is doing well
In February, the Eurozone’s growth outlook accelerates to a nine-month high. The ‘Flash’ seasonally adjusted S&P Global PMI Composite Eurozone Output Index – which combines manufacturing and services indicators – rose to 52.3 from 50.3 in January, thus showing the strongest expansion in economic activity since last May. Any indication above 50 points is in fact synonymous with growth.
Among the individual cases, it should be noted that the composite PMI of Germany is back above 50 points (thus escaping the recession) for the first time in eight months. In France it grows to 51.6 points.
In general, it is the tertiary sector that drives. The eurozone’s February rally was led by the services PMI which rose to 53 points from 50.8, marking the strongest expansion since last June. At the same time, manufacturing posted a modest increase, with the industrial production index rising from 48.9 to 50.4 and showing the first expansion since last March.
The EU opens in the red
European stocks start lower ahead of key data on manufacturing PMIs from France, Germany, the Eurozone and Great Britain for February. There is also anticipation for tomorrow’s Fed minutes. Investors are considering very concretely the possibility that central banks will keep interest rates higher for longer to curb inflation and this also puts strain on Treasury yields, with 10-year and 2-year both rising respectively at 3.85% and 4.66%. In the first trades in London the Ftse 100 index lost 0.21% to 7,997.70 points, in Frankfurt the Dax dropped 0.22% to 15,443.55 points and in Paris the Cac40 dropped 0.07% to 7,330.65 points. In Piazza Affari, the Ftse Mib index marks -0.26% to 27,523.97 points.
Mixed Asian stock exchanges, bad Hong Kong
The Asian markets proceed in no particular order in the final session. After Tokyo closed slightly down, Hong Kong sees the Hang Seng index lose 1.43%, while Shanghai defends itself with a slight rise of 0.12%. The Shenzhen index, on the other hand, dropped 0.24%.
The Japanese PMI is bad, Tokyo closes down
The Tokyo Stock Exchange closed its session with a loss with the Nikkei falling 0.21% to 27,473 points, while the Topix index lost 0.11% to 1.997 points. The Japanese manufacturing PMI, which dropped to a 30-month low, affected the Japanese stock market, a worrying sign for the world‘s third largest economy, which is facing weakening demand and struggling to tame cost pressures. The flash PMI dropped to 47.4 points in February, from 48.9 points the previous month.
Weak futures on Europe and Wall Street. Euro little moved
The main European stock exchanges are heading towards a downturn for the start of the session after yesterday’s difficult session. Futures on the Frankfurt Dax file down 0.10%, those on the London FTSE 100 drop by 0.14% while an initial drop of 0.12% is expected for the EuroStoxx 50.
Slight declines, after yesterday’s holiday closure, also arriving on Wall Street. Futures on the Dow Jones file down 0.09%, those on the S&P 500 drop by 0.11% while for the Nasdaq an initial decline of 0.14% is looming.
The euro opens with little movement both against the dollar (the single currency is traded at 1.0669 dollars, -0.11%) and against the yen (143.45, +0.06%). Dollar/yen at 134.43 (+0.17%).