Published on : 01/09/2022 – 18:18Modified : 01/09/2022 – 18:16
Paris (AFP) – The Paris Stock Exchange chained a sixth session of decline in a row on Thursday, weighed down this time by the announcement of a new confinement in China following several aggressive statements by central bankers in recent days.
The CAC 40 index fell 90.79 points to 6,034.31 points, in a now more sustained trading volume of 3.1 billion euros. The day before, it had fallen by 1.37%.
The Parisian rating opened in the red and remained there throughout the day, ending in negative for the ninth time in ten sessions.
“For the moment, there is no upward catalyst”, summarizes Alexandre Baradez, analyst of IG.
The latest bad news to date, China confined more than 20 million people to Chengdu, a metropolis in the south-west of the country, on Thursday, when the Asian giant is facing a limited epidemic rebound. The companies most exposed to the second world economy, in particular in luxury, heavyweight of the Parisian index, suffered.
The decision also weakens global growth, while fears of recession are strong in Europe and the United States.
Now the officials of the American Central Bank (Fed) just like those of the European Central Bank (ECB) “assume the risk of recession to lower the outlook for inflation”, which frightens investors who had believed this summer in a pivot monetary policies towards easing, explains Mr. Baradez.
In this context, the cost of debt in France has risen further (to 2.17% for the 10-year loan), and the dollar has risen once morest other currencies, in particular the euro (-1.06 % at 0.9947 dollar for one euro around 4:00 p.m. GMT).
For Mr. Baradez, however, there are slightly more positive “weak noises”, in particular “the price component” of the ISM manufacturing activity indicator in the United States which has slowed significantly, “a leading indicator which augurs well for ‘a drop in prices,’ he explains.
On Friday, investors will await the official monthly employment report in the United States. A still tight job market will prompt the Fed to tighten its policy while a slowdown in wage growth would be a positive sign for investors.
Pernod Ricard waters its shareholders
The French international wine and spirits group saw its net profit increase by 53% to 2 billion euros in its staggered 2021/2022 financial year, ending in June, “a record year” according to its CEO. Pernod Ricard has proposed to increase the dividend by 32% and intends to buy back 500 to 750 million euros of its shares within a year. Its title achieved the best performance of the session on the CAC 40 (+0.46% to 184.40 euros).
China penalizes luxury and raw materials
The sluggish economic context in China, a market in which luxury companies make a large part of their profits, weighed on these values: Hermès fell 2.53% to 1,250 euros, LVMH by 2.27% to 632.80 euros , Kering by 2.15% to 492.20 euros.
The pressure on global activity has also penalized raw materials, such as ArcelorMittal (-6.25% to 22.27 euros) or Eramet (-6.42% to 79.40 euros), which has even plunged 20% since the beginning of the week.
© 2022 AFP
