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Paris (AFP) – The Paris Bourse dropped 0.83% on Friday morning, hampered by a poor economic indicator, in addition to the aggressive tone adopted by the European Central Bank (ECB) on Thursday.
The star CAC 40 index yielded 53.87 points to 6,468.90 points, falling to its lowest since November 10. By Thursday, it had fallen more than 3%, its biggest drop since March 4.
Private sector activity contracted more than expected in December, penalized by the services sector, and reached its lowest level since February 2021, according to the PMI Flash indicator published Friday by the firm S&P Global .
A data that was received negatively by the actors of the Paris Stock Exchange already worried that the rate hikes carried out by the central banks would push the economy towards recession.
The decline in private sector activity “in France, the second largest economy in the euro zone, increases the risk of recession in the region”, worries indeed Joe Hayes, an economist at S&P Global quoted in the press release published on Friday.
On Thursday, the ECB raised its rates by 0.50 percentage points, a moderate increase following two increases of 0.75 points, but its president Christine Lagarde multiplied the formulas to send a message of firmness and reaffirm that the fight once morest inflation is not over.
“It’s the end of a half, it’s not the end of the match” once morest the rise in prices, added Friday on BFM Business the governor of the Banque de France, François Villeroy de Galhau, estimating that “probably several” increases are still to come while “the European economy is in fact more resilient than feared”.
“ECB President Christine Lagarde has killed all hope that the ECB will take into account the slowing economy, and the recession, when raising rates,” said Ipek Ozkardeskaya, analyst at Swissquote Bank.
The European Central Bank has also raised its inflation forecasts for the coming years and does not expect to reach its 2% target, even in 2025.
These announcements, coupled with equally stringent announcements from the US Federal Reserve and poor macroeconomic data showing a slowdown in US economic activity, paint a grim picture for the economy in the months to come.
Worried regarding the risks of recession, the Wall Street indices fell Thursday from 2.25% for the Dow Jones to 3.23% for the Nasdaq.
Euronext separates from an activity
The pan-European stock exchange operator Euronext announced Thursday the sale of MTS Markets International, an American subsidiary acquired during the takeover of the Milan Stock Exchange. This operation is part of the desire to “divest from non-essential assets” defined following a “strategic review”. The title lost 2.96% to 68.14 euros.
CMA CGM south M6
The French maritime transport group CMA CGM now holds 5.02% of the capital of the television and radio group M6 (-1.18% to 14.25 euros), according to the declaration of threshold crossing published by the Autorité des financial markets (AMF).
A single head at Nexity
Véronique Bédague, CEO of Nexity since May 2021, will take over as sole head of the group by becoming CEO, the leading French property developer announced on Thursday. Nexity shares fell 2.10% to 24.30 euros.
© 2022 AFP
