(BFM Bourse) – The Parisian index fell 2.3% on Friday to close this tough week below 5,800 points, as markets are concerned about the risk of a recession induced by a fierce fight by central banks against inflation. record. The CAC 40 lost nearly 5% on a weekly basis.
Throw no more! Between the renewed tensions in the Ukrainian conflict, the announcements of the US Federal Reserve and the prospect of a recession, the Paris Stock Exchange closes this tough week completely washed out to fall to its lowest closing level since February 25, 2021.
The CAC 40 thus closed Friday’s session with a sharp fall of 2.28% to 5,783.41 points, after registering lows in the session at 5,765.65 points shortly before 4:00 p.m. For the week as a whole, the Parisian index shed 4.8% and more than 20% compared to its peak on January 5.
On Wall Street, the atmosphere is also feverish, the Dow Jones recovered 1.4%, the Nasdaq lost 1.5% while the S&P fell 1.7% at the close of European stock markets. Therefore, the fight against inflation will increasingly come at the cost of a recession. A scenario that is far from reassuring investors…
“Most of the major central banks continue on their fantastic path to combat 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.
“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, a specialist in Mirabaud investments.
Fears of an upcoming recession in the euro zone are materializing in the statistics. Eurozone PMIs, which measure private sector activity in the currency union, were dim. 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.
black gold blues
In addition, fears of a global recession are causing oil prices to fall. WTI traded below $80 for the first time since January, while North Sea Brent fell almost 5% to $86, with prices in the two global benchmarks also affected by the strength of the dollar against major currencies.
Oil stocks are at the forefront of this bout of weakness, with TotalEnergies down 5%, Vallourec down 5.3% and CGG down 6.7%.
As for the rest of the values, few survivors to report except for M6 who led this session. The former small and emerging channel gained 8.1%, still benefiting from renewed speculative interest as its owner RTL Group decided to put its 48% stake in the French audiovisual group up for sale.
Airbus showed resistance (-0.4%) after the aircraft group’s management pledged to improve shareholder returns, citing possible share buybacks.
Automotive suppliers skated throughout the session. Faurecia lost 11.5%, Valeo fell 10.25%, while Akwel, which posted considerably lower half-year results, ended down 4%.
On the small- and mid-cap side, business transformation advisory group Micropole slumped more than 14% as its half-year results were hit by costs needed to attract talent.
In the currency market, the euro fell 1.20% against the dollar to $0.9717, a 20-year low, with the dollar benefiting from its safe-haven status. The pound fell below the symbolic threshold of $1.10 on Friday after budget announcements seen as costly for public finances.
Sabrina Sadgui – ©2022 BFM Bourse
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