2023-08-09 07:14:08
Around 9:50 a.m., the flagship CAC 40 index rose by 1.27%, or 92.01 points to 7,361.56 points. On Tuesday, it fell 0.69% to fall below 7,300 points, weighed down by the banking sector and Chinese statistics.
Unlike Tuesday, all the values of the CAC 40 are displayed in green on Wednesday morning and the shares which had fallen the most rebounded, in particular the banks BNP Paribas (+ 1.96% to 58.89 euros) and Crédit Agricole (+0.85% to 11.61 euros).
The day before, the Italian government’s announcement of a 40% tax on banks’ “billion-euro surplus profits” plunged the entire sector into the red in Europe.
Luxury stocks are also rebounding: LVMH rose by 1.19% to 816.50 euros, Hermès by 1.31% to 1,921.80 euros and Kering by 1.09% to 520.20 euros around 9:45 a.m.
And this, despite the announcement of a drop in the consumer price index in China, the main gauge of inflation, to -0.3% over one year in July.
The country thus enters deflation for the first time since 2021, bad news for the economy because it means that consumers, instead of spending, postpone their purchases in the hope of more price cuts.
“Signs of an economic slowdown have been present for months in China, as producer price inflation has been negative throughout the year and the consumer price index has followed by a long way,” said CMC Markets analyst Michael Hewson.
On Tuesday, China’s trade balance showed a drop in Chinese imports and exports in July, adding to investor concerns regarding China’s domestic demand.
Investors have been worried for several months regarding the economic dynamics in China and hope to see the authorities put in place support measures. While the end of Covid-19 restrictions had raised hopes of a strong rebound, the reality has been more nuanced, with statistical data regularly showing signs of weak domestic demand.
Apart from the evolution of prices in China, “the agenda of economic indicators is empty”, notes Christian Parisot for the broker Aurel BGC. “Investors will be waiting for the publication tomorrow of consumer prices in the United States,” he predicts, while specifying that “the market movements of the day will not be linked to economic indicators”.
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