The Paris Stock Exchange fell 2.9% on Monday, its worst day since December 15, destabilized by fears of contagion after bankruptcies of American banks, which plunged values in the sector around the world.
The star CAC 40 index ended at 7,011.50 points, its lowest closing level since January 20, after even dropping below 7,000 points for part of the session.
On the two sessions of Friday and Monday, the CAC 40 lost more than 4% and now aligns five sessions of decline – its longest series since the beginning of December – while the bond market has relaxed significantly.
Initially, the stock markets “reacted rather well” to the measures announced this weekend by the American authorities to reassure on the stability of the banking system after the bankruptcy of Silicon Valley Bank (SVB), notes Quentin Doulcet, of Myria AM.
On Sunday, the American authorities had already announced that the deposits of SVB would be guaranteed in their entirety and the American central bank, the Federal Reserve, (Fed) had undertaken to lend the necessary funds to other banks to honor the requests. of withdrawals.
But quickly, the European markets turned around, driven by banking stocks: BNP Paribas and Société Générale respectively dropped 6.80% to 56.15 euros and 6.23% to 23.94 euros, while Crédit Agricole lost lost 3.07% to 10.68 euros, wiping out more than 10 billion euros in market capitalization in two sessions.
The declines were however more limited at the end of the day than in the middle of the session, while the Banque de France assured that French banks “are not exposed” to the bankruptcy of SVB.
“The problem is that when there is financial instability, we know that these large movements can lead to a breakage somewhere,” adds Mr. Doulcet. “Investors are taking their marbles out of play right now and prefer to wait.”
As a result, values deemed to be safer attract investors, in particular government bond rates. Debt is also benefiting from the prospect of more limited increases in key rates by central banks, in response to the instability of the banking system.
Some, like the US two-year rate, are experiencing historic falls. The French 10-year rate was worth 2.80% around 6:00 p.m., against 3.01% at the close on Friday and even 3.23% a week earlier.