The Paris Stock Exchange ended up 0.59% on Thursday, calmed a little by the press conference of the President of the European Central Bank Christine Lagarde after the excitement following the meeting of the American Federal Reserve.
The flagship CAC 40 index gained 44.63 points to 7,575.85 points. It did not beat by a hair its closing record dating back to April 2023, but established in the first exchanges a new absolute high, 7,653.99 points.
The Parisian rating was still well above 7,600 points before Christine Lagarde’s press conference following the meeting of the European Central Bank (ECB), which saw the institution leave its rates unchanged as planned.
It has been much more cautious regarding the fight against inflation than market expectations, notes Raphael Thuin, director of capital market strategies at Tikehau Capital. It signaled a certain annoyance at the drop in bond rates on the markets over the past month, he believes.
The statements led investors to believe that, from the institution’s perspective, the risk-inflation balance has not changed much, with always the risk of not doing enough.
Another signal that investors were surprised by the tone adopted, the euro strengthened significantly against the dollar, gaining more than 1% at the Paris close.
Earlier in the day, the markets applauded the comments of the American central bank (Fed): President Jerome Powell acknowledged that the monetary committee had discussed a start timetable for rate cuts, opposite of Mme Lagarde later.
This has reassured the markets in their hope of significant reductions in key interest rates during the year 2024, taking into account the slowdown in inflation but also in economic activity.
On the bond market, interest rates on sovereign debts are falling sharply. The yield on France’s ten-year debt plunged to 2.64%, compared to 2.71% at Wednesday’s close, before the Fed’s announcements.
Vivendi on different screens
The media and publishing giant Vivendi climbed 9.96% to 9.85 euros, after announcing a plan to split its activities into several listed entities, structured in particular around Canal+, Havas and a investment company including its majority stake in the Lagardre group.
Vivendi explained that it suffered a very high conglomerate discount, meaning that the group’s current market valuation would be lower than the sum of the values of its subsidiaries and stakes in different companies.
Unibail celebrates the drop in rates
Shares of companies that suffered from rising rates have rebounded strongly.
In the real estate sector, Unibail-Rodamco-Westfield climbed by 5.50% to 66.32 euros, Icade by 5.73% to 35.08 euros, Klepierre by 4.90% to 24.82 euros, and Nexity 9.56% to 15.02 euros .
On the CAC 40, Alstom, whose cash flow and debts worry investors, posted the best progression in the CAC 40, with +8.88% to 11.65 euros.
Other stocks sensitive to interest rates also benefit, such as the automotive sector with Forvia (+9.95% to 20.83 euros) and Valeo (+8.13% to 14.10 euros), or also Air France-KLM ( +8.99% 13.29 euros).