The Paris Stock Exchange, apathetic for most of the session, woke up to the announcement of the resignation of Liz Truss from her post as British Prime Minister, with a push to more than 6,100 points for the Bedroom 40. At the close, the Parisian index was up 0.76%, at 6,086.90 points. The pound sterling and UK government debt rates are reacting well to this new development.
“Liz Truss has just resigned and the bookies are quoting potential replacements. The favorite is Rishi Sunak, beaten by Lizz Truss this summerreacts Frédéric Rollin, investment strategy advisor at Pictet Asset Management. The arrival of Rishi Sunak would be great news for gilts and sterling. The candidate is known for favoring prudent fiscal policy and productive reforms. His election could help the UK regain the credibility it badly needs. Be careful though. At this time, Boris Johnson remains in the race. His return could discourage international investors, generally rather disappointed by his mandate. »
“A policy reset would continue to erase the risk premium embedded in UK assets after the Truss/Kwarteng mini-budgetcomments Neil Mehta, portfolio manager at BlueBay AM. Especially if frontrunner Rishi Sunak becomes prime minister and implements a more orthodox conservative economic policy. With Jeremy Hunt as chancellor, we could see a more significant shift towards a more centrist government, with a greater focus on the economy rather than populist areas such as immigration and Brexit. This should encourage the gilts and the pound, but the longer-term challenges facing the UK economy with respect to the cost of living and inflation are unlikely to diminish. »
Yesterday, stock exchanges learned that inflation in the United Kingdom had gone back above 10%.
Oil prices are rebounding after a brief dip below $90 a barrel for Brent this week, on rumors, later confirmed, that the United States would release 15 million barrels of strategic reserves. The barrel rose again in session above 94 dollars, carried by information from the Bloomberg agency according to which Chinese politicians are debating a possible shortening of the quarantine period imposed on foreign travelers. TotalEnergies closed slightly higher on the Cac 40.
Pernod’s activity in the United States slows down
Hermes gained around 1.5%. The luxury saddler reported a 24.3% growth in sales at constant exchange rates in the third quarter, driven by strong momentum in all businesses as well as the rebound in sales in China. Hermès reiterated its medium-term outlook, namely “an ambitious goal of revenue growth at constant exchange rates” despite economic, geopolitical and monetary uncertainties.
Conversely, Pernod Ricard, which also published its turnover at the end of September, fell just over 1%. The spirits group expressed confidence in its outlook for the staggered 2022-2023 financial year, indicating that its “growth should continue to be dynamic” after a start of the year “very encouraging”, which resulted in a 22% increase in sales in the first quarter. RBC analysts note that while sales in Asia proved “remarkable”the slowdown observed in the United States is “somewhat worrying”.
Excluding CAC 40, Veralia jumped more than 6%. The glass packaging producer raised its annual adjusted EBITDA (gross operating surplus) target, after an increase in its results in the third quarter. The group is now targeting an adjusted Ebitda above 820 million euros this year, against a previous range of between 750 million and 800 million.
nokia, on the contrary, fell by almost 8%. The network equipment manufacturer generated operating profit of 658 million euros, up 3.9%, in the third quarter, against more than 702 million anticipated by the Bloomberg consensus. The group’s profit margin suffered in particular from delays in signing license and patent agreements with mobile phone makers Vivo Communication Technology and Guangdong Oppo Mobile Telecommunications, according to Jefferies analysts.
On the other side of the Atlantic, on the New York Stock Exchange, You’re here down 4%, but this does not prevent the Nasdaq Composite and the S&P 500 from rising. The world leader in electric cars unveiled last night a turnover below expectations, affected in particular by the rise of the dollar, as well as by disruptions in deliveries and production.