(BFM Bourse) – The Paris Stock Exchange had its best day of the year 2024, rebounding after its difficult session the day before with LVMH and Hermès as support points. The CAC 40 closed up 1.13%, making its last-minute return to 7,400 points.
Supported by luxury values, the Paris Stock Exchange is regaining color, which allows it to erase all of its decline recorded the day before (-1.07%).
The CAC 40 thus closes its best day of the year, up 1.13%, back on the edge at 7,400 points, at 7,401.35 points this Thursday. Still, the market must still digest cautious comments from central banks on rapid rate cuts.
For several sessions now, investors, who ended 2023 very confident about future key rate cuts from the European Central Bank (ECB) and the American Federal Reserve (Fed), have come back to reality somewhat. Several speeches from central bankers have, in effect, called on the market to be cautious about these expectations. This was particularly the case for Christine Lagarde, the president of the ECB warning that investors’ bets on rate reductions were not helping the central bank fight inflation.
“Christine Lagarde herself believes that excessive optimism in the markets can hamper the fight to bring inflation back to its target. Her ECB colleague, Klaas Knot, certainly a hawk, did not beat around the bush: for him, the more the (bond) market relaxes, the less likely rate cuts will be,” notes Alexandre Baradez, head of market analysis at IG France.
“Some members of the Fed are also vocal on the question of the pace of rate cuts. Two days ago, Christopher Waller estimated that with economic activity and a job market in good shape, as well as a inflation which is gradually falling to 2%, there was no reason to act as quickly or to lower rates as quickly as in the past,” he continues.
So many little sentences which sowed doubt among investors, and which caused the probability of rate cuts to plummet for the March meeting. According to the Fed Watch tool, they went from more than 90% at the end of December to 55.7% this Thursday afternoon.
STMicroelectronics at the top of the CAC 40
The fact remains that the CAC 40 ended on a very good note mainly thanks to the rebound of certain values. Particularly luxury: LVMH gained 2.5%, Kering 2.2% and Hermès gained 1.8%. These titles are buoyed by the good publication of the Swiss comparable Richemont, which jumped by more than 10% in Zurich, after having exceeded expectations for its third quarter activity, particularly in jewelry.
But it is STMicroelectronics which finishes at the top of the Parisian index, (+3.70%) supported by the good prospects of the Taiwanese TSMC, the leading semiconductor foundry in the world.
Also note a small rebound in the auto sector which is also recovering from a difficult session the day before, following Tesla’s price cuts. Renault regained 2% after losing 2% on Wednesday and the equipment manufacturer Valeo gained 3.2%.
Conversely, Carmat plunged 13.8% after launching a new capital increase necessary for its survival, amounting to 15 million euros.
On other markets, the euro lost 0.2% against the dollar, to 1.0861 dollars. Oil prices are rising. The March North Sea Brent contract rose 1.2% to $78.78 per barrel, while the February New York-listed WTI contract rose 1.6% to $73.62 per barrel. .
Sabrina Sadgui – ©2024 BFM Bourse