Stock markets reassured by China

 Stock markets reassured by China.

Stock markets reassured by China

Stock markets started the week on a positive note on Monday, reassured by China, but remained subject to uncertainty about the dynamics of global inflation and growth. European indices were moderately in the green in Paris (+0.54%), Frankfurt (+0.29%), London (+0.64%) and Milan (+0.32%) at 09:00 GMT. The session was expected to be quiet due to the closure of Wall Street for the Martin Luther King Day holiday. In Asia, the rise prevailed in Japan (+0.74%) and Shanghai (+0.6%), but the fall prevailed in Hong Kong (-0.7%).

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At LBPAM, Sebastian Paris Horovitz points to the "favorable wind coming from China", where "signals to support growth" have been given by the authorities. China announced on Monday a gross domestic product up 8.1% in 2021, the highest in a decade but in the fourth quarter, growth however lost steam (+4% year on year), after 4.9% to the previous one.

READ ALSOThe Chinese economy is marking time, despite record growth in 2021

The main indicator of consumption, retail sales rose last month by only 1.7% year on year, their weakest increase since the summer of 2020. To support the economy, the Chinese central bank thus lowered a key interest rate for the first time since April 2020. The measure aims to ease the pressure on small and medium-sized financial institutions to encourage them to extend more credit, on more favorable terms, to businesses. The central bank's action comes as the number of Covid-19 cases in China rose to its highest level since March 2020 on Monday, three weeks before the Winter Olympics.

Investors are also keeping an eye on inflation, which is affecting consumer confidence in the United States, and on the phasing out of crisis-related monetary support measures. "The monetary tightening to come, linked in particular to high inflation dominates the discussions on the markets", observes Sebastian Paris Horvitz, analyst at LBPAM.

The prospect of a rate hike in the United States in March to curb inflation has been factored into the trading rooms since clear declarations to this effect by several members of the American Federal Reserve last week. Risky assets, including equities, have so far fully benefited from the very low levels of interest rates but also from excess savings and abundant liquidity linked to the health crisis.

Unilever determined to buy the consumer branch of GSK

Food and hygiene giant Unilever clarified its growth strategy towards 'health, beauty and hygiene' and persisted with a £50bn bid for a rejected GSK Consumer Healthcare unit by GSK. The unit includes in particular brands of toothpaste or non-prescription drugs. Unilever shares fell 6.78% to 3,669.50 pence while GSK rose 4.56% to 1,715.80 pence.

READ ALSOUnilever confirms £50bn bid for GSK Consumer Healthcare

Resignation of the Chairman of Credit Suisse

Credit Suisse President Antonio Horta-Osório, splashed by revelations around the quarantine rules he had broken, has resigned from his post, the bank announced, choosing Axel Lehmann to succeed him. Credit Suisse shares lost 2.12% to 9.34 Swiss francs.

On the side of oil, the euro and bitcoin

Oil prices continued to rise moderately Monday after climbing Friday to their highest in two and a half months. The price of a barrel of Brent from the North Sea for March maturity advanced 0.23% to 86.25 dollars. In New York, a barrel of West Texas Intermediate (WTI) for February delivery rose 0.50% to 84.24 dollars.

The European currency took a modest 0.10% to 1.1427 dollars around 09:00 GMT. Bitcoin fell 0.30% to $43,853.