The Parisian index closed down 1.52% last Friday, falling below 6,500 points during a final difficult session. The last session will have closed a disastrous 2022, marked by galloping inflation, monetary tightening by the main central banks and conflict in Ukraine. However, the Paris market fared better than Wall Street or Frankfurt.
A path strewn with pitfalls
After a year that looked like an obstacle course, the Paris Stock Exchange is approaching 2023 with panache. Despite the Russian invasion of Ukraine, soaring inflation, the sharp rise in interest rates and an energy crisis on the Old Continent, the CAC 40 held up quite well this year.
After rebounding more than 15% from its September 29 low, the CAC 40 is down only 9.5% in 2022. But this is still its worst annual performance since 2018, when he gave up nearly 11% (10.95%). The decline contrasted with the almost 29% rebound recorded last year.
However, headwinds on the Paris Stock Exchange contrasted with the struggles seen on Wall Street, where the S&P 500 fell around 20% and the tech-heavy Nasdaq 33%.
Most other European stock markets also outperformed, from Madrid (-4%) to Frankfurt (-12%). London even recorded a small increase (+1.7%) over the year, driven by its mining and oil companies.
As a result, European stock indices have almost returned to pre-Ukrainian war levels. They are still showing significant growth compared to pre-pandemic peaks (the CAC 40 is up 7%).
A difficult year for operators
After two years of a global pandemic, investors’ nerves have been tested in 2022.
“In 2022, the contraction of the financial markets will have been painful for investors”, underlined in a recent note, Bruno Jacquier, economist at Atlantic Financial Group.
Market participants have had to deal with uncertainty regarding rising inflation, major power monetary policy tightening, soaring interest rates, rising commodity prices, continued difficulties in global supply chains, the continuation and end of the zero coronavirus policy in China, and sadly, the military invasion of Ukraine led by Russian troops.
“We can put 2022 behind us, but the difficulties could drag on for a few months as the Fed battles inflation. A mild recession could help prepare equities for a better second half of the year,” said Art Hogan, market strategist at B. Riley Wealth.
The main movements of the year 2022
In value, less than a quarter of CAC 40 shares ended the year up.
Commodities were the only ones to hold their own in terms of sectors this year, with the surge in the price of oil in particular. However, it was the defense group Thales which made the strongest progress, outperforming TotalEnergies (+33.69%) with more than 60% gain.
The aerospace equipment manufacturer Safran climbed to the podium with a gain of 8.60%, boosted by a resumption of air traffic, also synonymous with a revival of its service activity for civil engines.
Growth stocks, especially tech stocks, have negative balance sheets and the associated Stoxx 600 index fell 28% due to rising interest rates.
As a result, Dassault Systèmes lost 33.9% and Teleperformance 43.7% over the year. The Gafams also suffered a serious setback. Microsoft, Amazon and Meta fell 28.7%, 51.3% and 64.9% respectively. Even Apple, traditionally a safe haven, saw its title fall by 29.4% over the period.