Cac 40: Still hit by rate hikes, Paris stock exchange continues to fall
(BFM Bourse) – The CAC 40 fell sharply in the course of the session and didn’t get well from the Federal Reserve’s financial coverage tightening. Airbus bucked this unhealthy pattern, nonetheless, thanks to the announcement of a shareholder return coverage.
It was a troublesome week for the Paris stock exchange, which had to climate the brand new rigidity within the Ukrainian battle and particularly the announcement of the American Federal Reserve (Fed). With bulletins from the American central financial institution nonetheless heard, the CAC 40 misplaced 2.13% to 5,792.47 factors by 12:55 pm, after already dropping about 1.9% the day before today. Throughout the week, the Paris index is headed for a decline of greater than 3.5%.
“Most of the key central banks proceed their unbelievable journey to fight inflationary pressures. The race to tighten financial coverage may be described as historic in its scale and pace”, underlines Sebastien Paris Horwitz of La Banque Postale Asset Management.
The Fed needs to transfer rapidly
For this monetary middleman, “there isn’t a ambiguity in regards to the path of financial coverage for the approaching months. Not solely will development proceed, however they are going to speed up”. “In reality, the Fed needs to transfer rapidly towards a financial coverage that shall be clearly constrained, or towards optimistic actual charges,” he added.
“If Wednesday’s sharp rate hike continues all year long within the U.S. (and globally), the query is what the impression shall be on the true economic system.” On his facet is John Plassard, an funding specialist at Mirabaud.
In phrases of indicators, euro zone PMI indicators, which measure personal sector exercise within the financial union, had been hardly encouraging. The composite index, which incorporates manufacturing exercise and providers, stood at 48.2 in September, a 20-month low. As a reminder, a PMI beneath 50 signifies a contraction in exercise, above 50 an growth. “The September PMI survey is in line with a modest decline in eurozone GDP within the third quarter,” Capital Economics mentioned.
The euro plunges
. In different markets, the euro fell 0.7% to $0.9766 towards the greenback, a 20-year low, because the buck benefited from its place as a secure haven. Oil costs are additionally falling. The Brent contract for November supply misplaced 2% to $87.79 and the Nymex-listed WTI contract for a similar maturity fell 2.2% to $81.67.
In phrases of worth, pink is clearly de rigueur and automotive suppliers are notably affected. Faurecia misplaced 6.2%, Valeo fell 4.8% whereas Akwel, which revealed half-year outcomes, fell 2.1%.
Business transformation consultancy group Micropol plunged 15% as its half-year outcomes had been minimize by prices wanted to appeal to expertise.
Airbus resisted, and took 0.3%, signing the one enhance within the CAC40 as its administration undertook to enhance returns to shareholders, citing doable share buybacks.
M6 takes 8.2% of its share, nonetheless benefiting from renewed speculative curiosity as its proprietor RTL Group determined to put its 48% stake in French Audiovisual Group up on the market.
Bic took 2.2% for its share backed by UBS which initiated its purchase protection on the stock.
Julien Marion – ©2022 BFM Bourse