Cac 40: Insensitive to geopolitics and the Fed, the Paris Stock Exchange has regained 6,000 points


(BFM Bourse) – The Paris Stock Exchange more than resisted, credited with a gain of 0.87% on Wednesday evening. The star index resurfaced at 6,000 points despite threats from Vladimir Putin and before the Fed’s verdict on its key rates. Defense sector stocks have been propelled to the forefront of the strongest increases in the CAC 40.

Vladimir Putin’s “warmonger” tone, as well as the prospect of another rate hike by the Federal Reserve, could have sent the indices into the abyss of the stock market. But currently, observers are struggling to find any logic in the orientation of stock market indices.

Despite the threats of the Russian president, the Paris Stock Exchange therefore opts for an increase of 0.87% to 6,031.33 points after having evolved a good part of the session below the threshold of 6,000 points. The phlegm of its star index will have had the virtue of putting an end to a series of six consecutive sessions of decline.

Investors did not panic after Russian President Vladimir Putin’s remarks. The leader said he was ready to use “all means” at his disposal, including nuclear, to defend himself, assuring that he was not “bluffing”. Vladimir Putin will also mobilize 300,000 Russian reservists, which opens the way to an escalation in the conflict. However, a few hours later, China called for a ceasefire in Ukraine and for dialogue. This contrasts with the rather accommodating attitude of Beijing towards Moscow in recent weeks.

Western markets, for their part, are resisting the image of the New York Stock Exchange, which has been on the rise since the opening. The Dow Jones gained 0.46%, the Nasdaq index appreciated by 0.37% while the S&P 500 advanced by 0.52% at the close of European stock markets. Investors have their eyes on the Fed and its long-awaited decision on key rates.

The Federal Reserve is due to announce its monetary policy report tonight at the end of its two-day meeting. It should decide for the fifth consecutive time to raise its rates with the aim of fighting against inflation that is still high. “For the record, if an increase of 75 basis points (0.75 percentage point, editor’s note) is expected by the consensus, 100 basis points cannot be ruled out”, recalls John Plassard, investment specialist at Mirabaud. Operators will also be attentive to the Fed’s new economic forecasts and its projections on the evolution of interest rates.

After the Fed will come Thursday a procession of other central banks, namely the Bank of England, the Swiss National Bank, the Norges Bank (of Norway), the South African Reserve Bank (of South Africa) and the Bank of Japan. For the latter, discussions should focus more on the weakness of the yen.

The Paris Stock Exchange powered by defense

Defense groups benefited on Wednesday from the escalation in the Ukrainian conflict, Thales taking 4% and Dassault Aviation advanced 3.3% at the close.

But it was Vallourec who finished top of the SBF 120 this Wednesday evening, the group having announced a 10-year contract with the Saudi giant Aramco.

Schneider Electric gained 1.9% after announcing that it had submitted an offer to take up 100% of the capital of its British subsidiary Aveva.

On the front of small and mid-caps, OL Groupe appreciated by 14.3% while its boss, Jean-Michel Aulas, argues that the takeover of the group by the American businessman John Textor has already been signed.

On the other markets, the euro lost nearly 1% against the dollar at 0.9877 dollar, the greenback evolving to highest against the major currencies for 20 years, helped by its status as a safe haven.

Sabrina Sadgui – ©2022 BFM Bourse



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