(BFM Bourse) – The CAC 40 lost more than 1% again at mid-session on Friday, the market continuing to correct to integrate more restrictive policies from the major central banks.
The Paris Stock Exchange is heading for a new decline. The CAC 40 dropped 1.3% in mid-session on Friday, at 6,440.43 points, after having already dropped 3.1% the day before. Over the whole week, the Parisian index is currently down “only” by 3.5% thanks to the good session on Tuesday (+1.2%) when the market had been supported by lower American inflation. expectations to.
The market remains gripped on Friday by the messages posted in recent days by the major central bankers. Jerome Powell, the president of the American Federal Reserve, sent a signal of firmness on Wednesday evening in the fight of his institution against inflation, warning that the high rates were likely to last.
Christine Lagarde, the “Grinch” of Christmas
Especially the President of the European Central Bank (ECB), Christine Lagarde, took investors by surprise by indicating that market expectations on the terminal rate – the maximum rate that the euro zone institution will reach in the during its upward cycle – were too low to bring inflation back towards 2% in a satisfactory period of time.
“Any hope of a Santa Claus rally suffered a major setback yesterday as European markets fell sharply after ECB President Christine Lagarde played her Grinch role in presenting a very bleak outlook for the future. European economy in 2023,” said Michael Hewson of CMC Markets.
“While the Fed’s announcement is in line with our expectations, the direction the ECB is taking seems much more aggressive. We believe that the key rate could reach 3.25% or even 3.5% if there is no there has been no noticeable improvement on the inflation front,” said Sebastian Paris Horvitz, of La Banque Postale Asset Management.
Slight improvement in PMIs
Investors are also digesting the publication of the first estimate of the PMI indices for the euro zone for the month of December. The composite index, which measures the activity of the entire private sector, recovered to reach 48.8 against 47.8 in November, remaining below the threshold of 50 which marks the border between an expansion and a contraction. of the activity.
“December’s flash PMI indices show businesses in parts of the Eurozone are somewhat less pessimistic about their current situation. But they still point to a contraction in the fourth quarter and suggest that inflationary pressures have had very little decreased”, nuance Capital Economics.
The vast majority of stocks continue to suffer, with 38 of the 40 stocks in the CAC 40 losing ground.
Sensitive to rising interest rates, property companies are suffering. Covivio lost 4%, Klépierre 3.6%, Carmila 3.3%, Unibail-Rodamco-Westfield 3.5%.
Elior held up a little, taking 4.8% thanks to an increase in its recommendation to “outperformance” from Exane BNP Paris.
On the small cap side, Navya plunged 50.7% after being forced to withdraw information on a loan of 30 million euros which had been communicated in error. It turned out that this loan, which had not been finalized, constituted an attempted scam.
Lacroix for his part is almost stable after announcing several international contract wins.
On the other markets, the euro changed little against the dollar, at 1.0633 dollars. The North Sea Brent contract for delivery in February fell 2.5% to 79.23 dollars a barrel while that on WTI listed in New York for delivery in January lost 2.4% to 74.33 dollars. the barrel.
Julien Marion – ©2022 BFM Bourse