The Paris Stock Exchange made a technical rebound on Monday morning, following a week where the stock market fell more than 3% on fears that central bank action might cause an economic recession.
The star CAC 40 index rose 0.65%, or 42.11 points to 6,494.74 points, around 9:45 a.m. Last week, it experienced two sessions of sharp decline and concluded with a weekly loss of 3.37%, its worst week since September 23.
“After a trying week, at the end of the year, the financial markets should + stabilize + and mark a + break +”, anticipates Christian Parisot, for the broker Aurel BGC. “But statements by central bankers have profoundly affected monetary policy expectations and economic scenarios for 2023,” he said.
Last week, the American (Fed), European (ECB) and British (BoE) central banks raised their key rates by 0.5 percentage points, moderate increases compared to the previous ones, and reaffirmed that the fight once morest the he inflation was not over.
After having already raised its key interest rates four times since the summer, the ECB is ready “to go further to defeat inflation”, even if the objective “is obviously not to cause a recession “economic, warned Saturday the governor of the Banque de France, François Villeroy de Galhau, in an interview with the Journal du Dimanche.
“Investors are becoming more and more aware that the pivot (change of direction, editor’s note) of central banks is no longer for tomorrow following their last meeting”, commented John Plassard, investment specialist for Mirabaud.
The consequence of this monetary tightening carried out by the central banks might be a recession of the world economy, which would translate for the markets into a drop in corporate profits and therefore a drop in stock market valuations.
In France, the increase in gross domestic product (GDP) will decelerate sharply, from 2.6% in 2022 to 0.3% in 2023, according to the “most probable” scenario retained in the macroeconomic projections for the next three years of the Bank of France.
This slowdown will be followed by a rebound to 1.2% in 2024 – less than the +1.8% previously anticipated – and the recovery will continue in 2025 with growth expected at 1.8%.
On Monday morning, investors will take note of the IFO business climate index for Germany in December.
The week promises to be calm, both in terms of macroeconomic data and corporate news releases.
Innate relies on Sanofi
The French pharmaceutical group Sanofi and the Marseille biotech specializing in immuno-oncology Innate Pharma have announced the extension of their partnership in the development of multispecific antibodies.
Innate will initially receive 25 million euros and Sanofi obtains an exclusive license for the development, manufacture and marketing of future drug candidates.
The action of Innate Pharma climbed 15.98% to 2.38 euros and that of Sanofi took 0.64% to 88.18 euros.
Euronext CAC40