The Paris Stock Exchange drops by 1.83%, ignoring the re-election of Emmanuel Macron
The Paris Stock Exchange fell 1.83% on Monday in the face of the health situation which threatens Chinese growth and the stronger than expected tightening of American monetary policy, ignoring the re-election, already anticipated, of President Emmanuel Macron.
The star CAC 40 index lost 120.39 points to 6,461.03 points around 10:15 a.m. Friday already he had lost nearly 2%, worried regarding the statements of the boss of the Federal Reserve (Fed), and was stable over the week.
Emmanuel Macron was re-elected on Sunday as President of the Republic with more than 58% of the vote once morest Marine Le Pen (around 42%).
But the Parisian place ignored this outcome, notes John Plassard, investment specialist at Mirabaud.
Investors had been banking for weeks on a victory for the outgoing president and the markets had shown almost no sign of stress during the campaign.
“Other questions quickly took over, including the explosion of new cases of Covid-19 in China with the fear that unprecedented confinement might take place in Beijing shortly”, observes Mr. Plassard.
Almost all of the 25 million inhabitants of the Chinese economic capital Shanghai have been confined since the beginning of April, disrupting supply chains. And the threat of containment, following a rare epidemic outbreak, now threatens Beijing.
Faced with this situation, which is likely to weigh on production, household consumption, exports and therefore all of the country’s economic activity, the prices of oil and luxury and raw materials shares fell.
This unfavorable context for the stock markets is supplemented by expectations of stricter and faster than expected monetary tightening by the US central bank.
Faced with inflation, Jerome Powell, chairman of the Fed, said Thursday that a hike in key rates of half a percentage point “was on the table” for the next monetary meeting in early May.
Thus on Friday, the New York Stock Exchange had already ended with a severe loss, the Dow Jones recording its worst daily drop since October 2020.
These remarks “had a strongly negative impact on the indices and the trend might continue until at least the FOMC (monetary policy committee of the Fed, editor’s note) on May 4, during which the Fed should announce an increase of 50 points basis and confirm the acceleration of rate increases in the months to come,” warns Vincent Boy, analyst at IG France.
Luxury and mining weighed down by China
The luxury sector, very dependent on the Chinese market, suffered the blow on Monday. Kering lost 4.42% to 505.80 euros, LVMH 3.50% to 617.70 euros, Hermès 3.55% to 1,183.50 euros.
Shares of mining companies also clinked, investors anticipating disruptions in production chains and therefore in demand for raw materials. ArcelorMittal fell by 6.01% to 27.75 euros and Aperam by 4.09% to 36.09 euros.
Valneva an attente
The action of the Franco-Austrian laboratory tumbled 14.24% to 13.19 euros. Valneva said in a statement on Monday that it had received questions from the European Medicines Agency, which the laboratory will answer in order to obtain European marketing authorization for its candidate vaccine once morest Covid-19.
Euronext CAC40
