(BFM Bourse) – The CAC 40 ended up nearly 1.9% on Tuesday, regaining some of its heavy losses the day before. The drop in US inflation in line with expectations and signs of appeasement on the banks supported the market.
After recording its worst session on Monday since mid-December, the CAC 40, like other markets, experienced a burst of pride. The flagship index of the Paris Bourse thus recovered 1.86% to 7,141.57 points on Tuesday after losing 2.9% the day before.
The CAC 40 markedly accelerated its previously unconvincing rise after the publication of inflation figures in the United States for the month of February. The consumer price index, the main measure of price increases, rose by 6% and the “core” index, excluding changes in food and energy prices, by 5.5%, marking a decline compared to January (6.4% for the main index and 5.6% for the “core”). The 6% rate represents the lowest since September 2021. This data is right in line with the expectations of economists polled by the wall street journal.
For Naeem Aslam, “most market operators are satisfied” with these figures. “The strength of inflation data should not outweigh concerns about financial stability,” said Capital Economics.
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Rising bond yields
The markets have indeed been concerned for several sessions by the repercussions of the bankruptcy of the American bank Silicon Valley Bank and the risk of contagion to other establishments. Nevertheless, a breath can be observed on Tuesday, with small regional banks which had been rolled on the stock market on Monday but which are rebounding. This is the case of First Republic Bank which takes 56% on Wall Street after having fallen by 60% the day before.
Sovereign bond rates are also rising again, with the yield on the US 2-year debt securities trading at 4.376% against 3.985% on Monday.
Equity markets often react badly to a tension in bond rates but, in this case, this movement “comforted them, because if yields had continued to plunge, it would have made think of an aggravation of the crisis”, explained Karl Haeling, of LBBW, quoted by AFP.
Banks regain color
French banks, which had undergone significant releases on Friday and Monday, regained some color, Societe Generale gaining 2.3% and BNP Paribas, 3.1%.
Other values in the sentence in recent sessions have rebounded. This is the case for OVHcloud (+7.5%) and Casino (+7.3%).
Icade gained nearly 4.7% after announcing the sale of all of its health activities to reduce debt and seize new growth opportunities.
On other markets, the euro fell 0.1% against the dollar to 1.0723 dollars. Oil is losing ground. The May contract on Brent from the North Sea for May delivery fell 1.5% to 79.55 dollars a barrel while the April contract on Wall Street-listed WTI fell 1.6% to 73, $59 a barrel.
Julien Marion – ©2023 BFM Bourse