Reported by Jaime Sicilia Martínez
The main European indices rose following the conditional ceasefire agreement between Israel and Lebanon, which the market sees as a first step towards peace between the United States and Iran. The IBEX 35 closed up 0.6% and the Euro Stoxx 50 rose by 0.8%.
Broadcom, the world’s sixth-largest company by market capitalisation, issued worse-than-expected forecasts for its AI chip revenue, and Crowdstrike Holdings also fel despite having raised its revenue forecasts. Both pieces of news highlight investor fears regarding the sharp rise in the technology sector, which has pushed valuations to very high levels; consequently, any figures that are not as positive as expected could trigger a significant fall.
In the Asia-Pacific region, Hong Kong’s Hang Seng recorded the biggest decline (1.5%), whilst Japan’s Topix limited its fall to 1.1%. Most sectors fell after the latest oil price rally once again raised expectations of global monetary tightening. Bank of Japan officials could implement a 25-basis-point rate hike and see the possibility of a further hike by the end of the year as a result of rising inflation. Furthermore, they could slow the pace of bond-buying reductions or suspend them entirely.
Session highlights
Iran stated that no progress had been made in talks regarding a direct agreement with the US. Iran insists that any agreement with the US requires a definitive ceasefire in Lebanon, but Donald Trump is attempting to keep the two issues separate.
Bill Ackman, manager of Pershing Square, sold his €1.42 billion 4.5% stake in Universal Music Group after the company rejected a takeover bid.
Fixed Income
A session of slight falls in the yields of major sovereign bonds, against a backdrop where money markets are pricing in an expected 25-basis-point rate hike by the ECB next week and another at the end of the year. Thus, the 10-year Bund yield has fallen by 1 bp to 3.02% and the 10-year Treasury yield has fallen by 3 bp to 4.46%.
Commodities and currencies
The fall in oil prices yesterday was due to the ceasefire between Israel and Lebanon. US oil companies warned the White House that the current closure of the Strait of Hormuz is depleting global oil reserves and could lead to sharp rises in petrol prices in the coming weeks.
