Cac 40: Still hit by rate hikes, the Paris Stock Exchange continues to fall

Cac 40: Still hit by rate hikes, the Paris Stock Exchange continues to fall

(BFM Bourse) – The CAC 40 fell sharply mid-session and is not recovering from the Fed’s monetary policy tightening. However, Airbus resists this bad trend thanks to the announcements about the shareholder return policy.

It was a tough week for the Paris Stock Exchange, which had to weather the renewed tensions in the Ukrainian conflict and especially the announcements from the US Federal Reserve (Fed). Still shaken by the announcements from the US central bank, the CAC 40 lost 2.13% by 12:55 pm to 5,792.47 points, after having already lost around 1.9% the day before. For the week as a whole, the Parisian index is heading for a drop of more than 3.5%.

“Most of the major central banks are continuing their fantastic journey to fight inflationary pressures. The race to tighten monetary policy can be described as historic in its scale and speed,” said Sebastian Paris Horvitz of La Banque Postale Asset Management.

The Fed wants to move fast

For this financial intermediary, “there is no ambiguity about the course of monetary policy for the coming months. Not only will the increases continue, but they will occur at an accelerated pace.” “In fact, the Fed wants to move quickly toward monetary policy that will be clearly tight, or toward positive real rates,” he adds.

“With Wednesday’s sharp rate hike set to continue throughout the year in the US (and around the world), then the question arises what the impact will be on the real economy,” said John Plassard, investment specialist at Mirabaud.

In terms of indicators, the Eurozone PMIs, which measure private sector activity in the monetary union, were less than encouraging. The composite index, which includes manufacturing activity and services, stood at 48.2 in September, a 20-month low. As a reminder, a PMI below 50 indicates a contraction in activity, above 50 its expansion. “September PMI surveys are consistent with a slight drop in eurozone GDP in the third quarter,” Capital Economics said.

the euro sinks

. Elsewhere, the euro fell 0.7% against the dollar to $0.9766, a 20-year low, with the dollar benefiting from its safe-haven status. Oil prices are also falling. The Brent contract for November delivery fell 2% to $87.79 while the Nymex-traded WTI contract for the same expiration fell 2.2% to $81.67.

On the value side, red is obviously de rigueur and auto suppliers are particularly suffering. Faurecia lost 6.2%, Valeo fell 4.8% while Akwel, which posted sharply falling half-year results, fell 2.1%.

Business transformation consulting group Micropole slumped 15% as its half-year results were undermined by the costs needed to attract talent.

Airbus resists, taking 0.3%, signing the CAC40’s only rise after its management pledged to improve shareholder returns, citing possible share buybacks.

M6 for its part takes 8.2%, still benefiting from renewed speculative interest as its owner RTL Group has decided to put its 48% stake in the French audiovisual group up for sale.

Bic, for its part, took 2.2% supported by UBS, which began its purchase coverage of the stock.

Julien Marion – ©2022 BFM Bourse

#Cac #hit #rate #hikes #Paris #Stock #Exchange #continues #fall

Leave a Comment

Your email address will not be published. Required fields are marked *