(BFM Bourse) – The Parisian index closed Friday down 1.52% in a difficult last session, falling below 6,500 points. This punctuates a sad 2022 vintage, marked by galloping inflation, the tightening of monetary policy by the major central banks and the conflict in Ukraine. However, the Paris market held up better than Wall Street or Frankfurt.
The Paris Stock Exchange puts an end to a year 2022 to forget for the equity markets. The CAC 40 ended the session on Friday, January 30 down 1.52% to end at 6,473.76 points. Over the last week of 2022 as a whole, the index fell anecdotally by 0.48%, in a period that was not very lively in terms of volumes.
The equity markets more than wiped out their gains the day before (+0.97%), themselves fueled by weekly jobless claims in the United States that were worse than expected. This was interpreted by investors as a sign that the Federal Reserve’s monetary policy tightening is having an effect and, by extension, that it might not be more aggressive in its future key rate hikes.
The start of the session in the red of Wall Street weighed on the trend, clearly accentuating the losses of the CAC 40. All the values of the index ended in negative territory, the largest falls being accused by Michelin (-3%) , Hermès (-2.7%) and LVMH (-2.4%).
On the other markets, the euro took 0.2% against the dollar at 1.0683 dollars. Oil prices are changing little. North Sea Brent crude for March delivery rose 0.7% to $84.03 a barrel, while WTI crude in New York for February delivery gained 0.5% to $78.81 a barrel.
Worst year since 2018
Over the whole of 2022, the CAC 40 finally lost 9.5%, its worst annual performance since 2018, when it had dropped almost 11% (10.95%). A decline that contrasts sharply with the rebound recorded last year, of nearly 29%.
However, the Parisian place has resisted headwinds better than several other of its counterparts. The S&P 500 on Wall Street is down more than 19% for all of 2022, while the DAX 40 in Frankfurt is down about 12%. Conversely, the FTSE 100 on the London Stock Exchange rose 0.91% despite an atrocious year for the British economy. The flagship index of the London market was carried by the defense group BAE Systems, the whole of this sector having been propelled by the conflict in Ukraine, perceived as a catalyst for military spending in the medium term, as well as by the presence of many groups specializing in commodities, such as mining and oil stocks (Rio Tinto, BP, Antofagasta, Glencore).
Investors’ nerves have been tested in 2022, after two years marked by the global pandemic. Market operators have had to contend with galloping inflation, the tightening of monetary policies by major power stations, soaring interest rates, rising commodity prices, persistent difficulties in global supply chains, uncertainties caused by the maintenance and then the end of the zero-Covid policy in China, and unfortunately, the military invasion of Ukraine by Russia.
“In 2022, the contraction of the financial markets will have been painful for investors”, underlined in a recent note, Bruno Jacquier, economist at Atlantic Financial Group.
“2022 has been an exceptional year: it is the first time in recent history that risky assets, such as equities or credit, as well as defensive assets such as public bonds, have fallen sharply in parallel. This is the result of rising inflation and declining growth prospects at a time when asset valuations were very high,” explained Xavier Chapard of La Banque Postale Asset Management.
“This widespread fall in financial markets is the result of a change in macroeconomic regime. Inflation, which had not been seen at such high levels in developed countries since the 1980s, is back… and it is noticeable”, abounds Bruno Jacquier.
Thales, the big winner of the CAC 40
The nervousness is likely to continue into the first weeks of 2023. “The main themes [du marché, NDLR] will continue to dominate in early January, including the extent to which central banks are willing to push interest rates in order to show their determination to bring inflation back towards the “2% target”, underlines Craig Erlam of Oanda.
“Recession, inflation and stagflation are likely to dominate the headlines next year,” warned Ipek Ozkardeskaya, an analyst at Swissquote Bank, quoted by AFP.
As for values, less than one in four securities in the CAC 40 ended the year up. The strongest increase was signed by the technology and defense group Thales, with an increase of nearly 60% ahead of TotalEnergies (+33.69%) which benefited from high oil and gas prices, while posting results high flights. The aeronautical equipment manufacturer Safran, which was driven by the recovery in air traffic, synonymous with recovery for its civil engine services activities, completed the podium with an increase of 8.60%. (Note that we will come back in an article to be published early Saturday morning on the big winners and losers of the SBF 120).
Here is the 2022 ranking of the CAC 40 in variation
- Thales +59.49%
- TotalEnergies +33.69%
- Saffron +8.60%
- Sanofi +5.48%
- Engie +2.87%
- Renault +2.39%
- Vinci +0.41%
- +0.37%
- Axa -0.5%
- Airbus -1.19%
- Orange -1.4%
- Carrefour -2.89%
- Air Liquide -5.01%
- Hermes -5.92%
- LVMH -6.48%
- EssilorLuxottica -9.63%
- Danone -9.82%
- Bouygues -10.96%
- BNP Paribas -12.37%
- ArcelorMittal -12.68%
- Pernod Ricard -13.12%
- L’Oreal -19.99%
- Stellantis -20.43%
- Unibail-Rodamco-Westfield -21.08%
- Crédit Agricole SA -21.67%
- Societe Generale -22.26%
- STMicroelectronics -23.92%
- Schneider Electric -24.20%
- Vivendi -25.03%
- Worldline -25.46%
- Veolia -25.60%
- Saint Gobain -26.22%
- Alstom -26.91%
- Legrand -27.29%
- Capgemini -27.63%
- Michelin -27.89%
- -32.73%
- Dassault Systems -35.97%
- Eurofins -38.36%
- Teleperformance -43.19%
Julien Marion – ©2022 BFM Bourse