(BFM Bourse) – The Parisian index ended sharply higher this Friday. The rebound in retail sales in China and the probable end of ECB rate hikes supported the market even if Wall Street spoiled the party a little.
Everything was decided at the end of the week for the Paris Stock Exchange. The CAC 40 ended up this Friday, gaining 0.96% to 7378.82 points, the day after an increase of 1.2%. Over the week as a whole, the Parisian index gained 1.906%.
Support for Friday’s session came from China with positive indicators, notably a rebound in retail sales in August.
“These retail sales showed a positive inflection in August. Since June this indicator had declined, going from an increase of 12.7% in May to 3.1% in June then 2.5% in July. they rose again by 4.6%. However, retail sales are very linked to consumer confidence,” explains Jie Zhang, luxury sector analyst at the independent research firm AlphaValue.
Consequence: luxury heavyweights, very exposed to China, have progressed significantly, boosting the Parisian rating. LVMH gained 2.5%, L’Oréal gained 1.9% and Kering gained 1.8%.
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End of rate hikes for the ECB
This good news took over from the European Central Bank (ECB) which raised its rates by 25 basis points (0.25%) but clearly hinted in its press release that this increase would be the last.
The rate rise “was accompanied by a message from the ECB suggesting that it was most likely the last hike of this cycle, although Lagarde tried to leave the door ajar to further rate hikes if necessary”, observes Xavier Chapard of La Banque Postale Asset Management.
“We believe that the cycle of rate increases is over and that the ECB will maintain this high rate in the coming months,” he adds.
This probable end to rate hikes by the euro zone central bank was greatly appreciated by investors.
Wall Street in the red
It should be noted, however, that this Friday’s trend lost strength with the lower opening of Wall Street, following better than expected indicators – such as manufacturing activity in the New York region – and perhaps concerns linked to the start of the strike among the “big 3” automotive companies (Ford, GM, Stellantis). The S&P 500 lost 0.9% before the close of European markets.
Stellantis hardly suffered on the stock market from the start of the strike in the United States and gained 1.7% in Paris.
On the foreign exchange market, the euro gained 0.3% to 1.0676 dollars the day after its decline in reaction to the ECB’s latest announcements. Oil contracts are progressing. The November North Sea Brent contract gains 0.05% to $93.75 per barrel, while the October New York-listed WTI contract advances 0.5% to $90.64 per barrel. .
Julien Marion – ©2023 BFM Bourse