Reported by Jaime Sicilia Martínez
European stock markets closed on a generally positive note following the signing of the provisional agreement between the US and Iran. The fall in oil prices has reduced inflationary risks, although the Fed’s more hawkish stance has curbed risk appetite. The IBEX 35 fell by around 0.1% and the EuroStoxx 50 has risen by 0.4%.
In Asia, the session was positive in Japan and South Korea. Japan’s TOPIX rose by 1.4% and the KOSPI advanced by 2.3%, driven by the semiconductor sector. In mainland China, the CSI 300 closed with a slight rise of 0.2%, whilst Hong Kong’s Hang Seng fell by around 1.6%.
In the United States, Wall Street was trading higher at the close of European trading, recouping some of the previous session’s losses. The S&P 500 was up by nearly 1 per cent and the Nasdaq was buoyed by the technology sector, with particular strength in semiconductors.
Key developments of the session
The key factor was the signing of the provisional agreement between the US and Iran, which provides for the gradual reopening of the Strait of Hormuz.
In Europe, the technology sector once again showed relative strength. Infineon stood out within the semiconductor sector, buoyed by the positive global trend in shares linked to artificial intelligence. Conversely, SAP weighed on the German market.
The session was also marked by the market’s reaction to the Federal Reserve. The central bank kept interest rates unchanged, but the new chairman, Kevin Warsh, left the door open to a rate rise before the end of the year, which prevented a clearer reaction from European equities.
Fixed Income
Fixed income performed steadily, with moderate movements in both Europe and the United States. Investors continue to analyse the Federal Reserve’s message and Kevin Warsh’s comments, which reinforced the view that interest rates could remain high for longer.
The yield on the German Bund remained at around 2.92%, whilst the Spanish 10-year fell fallen slightly to around 3.34%.
In the United States, the yield on the 10-year Treasury stood at around 4.43 per cent, returning to levels similar to those at the previous open. The movement was mainly driven by the market’s reaction to the Fed’s message and the perception that the current level of interest rates remains sufficiently restrictive to contain inflation.
Commodities and currencies
Brent crude fell to around $77.5 per barrel. This move follows the signing of the US-Iran agreement and expectations of a gradual reopening of the Strait of Hormuz, although the market remains cautious regarding the implementation of the deal.
