France leads European stocks lower in mega week for central banks

The DAX chart of the German stock price index is pictured on the stock exchange in Frankfurt, Germany, September 16, 2022. REUTERS/Staff/File Photo

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  • TFI and M6 slip after the abandonment of the merger of French television groups
  • Rate-sensitive tech sector slips 1%
  • Volkswagen chasing €75 billion valuation in Porsche IPO

September 19 (Reuters) – French stocks dragged European markets lower on Monday after two major TV groups scrapped their merger plans, in a dismal start to the week that could see a sharp rise in interest rates by the Federal Reserve and a host of other central bank meetings.

The pan-European STOXX 600 index (.STOXX) traded down 0.7%, while the French CAC 40 index (.FCHI) fell 1.3%. Both indices hit their lowest level in two months.

Shares of TF1 (TFFP.PA) fell 3.2% and M6 (MMTP.PA) 4.5% after plans to merge the French TV companies failed as they noted that Antitrust demands had rendered the deal irrelevant.

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The blue-chip Eurozone stock index (.STOXX50E) lost 1%, with French luxury group LVMH (LVMH.PA) and semiconductor maker ASML (ASML.AS) leading the losses .

Rate-sensitive tech stocks (.SX8P) fell 0.9% at 0804 GMT, ahead of the Federal Open Market Committee’s (FOMC) interest rate decision on Wednesday. Most market participants are expecting the US central bank to make a third straight hike of 75 basis points.

“Investors seem to be worried about upcoming central bank meetings,” said Patrick Armstrong, chief investment officer at Plurimi Wealth.

Most of the banks gathered this week – from Switzerland to South Africa – are expected to rise, with markets split on whether the Bank of England will go 50 or 75 basis points.

“We have the Fed meeting followed by the Bank of England this week and the question of how much they’re going to rise? So anyone thinking of buying stocks is waiting for events to happen,” Armstrong said.

European markets closed their worst weekly performance in three months on Friday on escalating recession fears amid aggressive central bank tightening.

London markets are closed on Monday for Queen Elizabeth’s state funeral.

Yields on eurozone government bonds rose slightly, with Germany’s benchmark 10-year yield near mid-June highs hit last week.

In a bright spot, Volkswagen (VOWG_p.DE) edged up 0.1% as it saw a valuation of up to 75 billion euros ($75.1 billion) for luxury sports car maker Porsche, in which will be the second largest initial public offering (IPO) in Germany. in history. Read more

Shares of Porsche Holding SE (PSHG_p.DE), Volkswagen’s largest shareholder, gained 2.6%, outperforming Germany’s DAX index (.GDAXI).

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Reporting by Shreyashi Sanyal and Johann M. Cherian in Bengaluru; Editing by Saumyadeb Chakrabarty and Sriraj Kalluvila

Our standards: The Thomson Reuters Trust Principles.

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