Cac 40: The health and social situation in China worries the world stock markets


(BFM Bourse) – The CAC 40 closed this first session of the week down. The market is worried about the consequences for China of the protests against the country’s zero-Covid policy.

The Paris Stock Exchange starts the week feverishly after the latest developments on China. The Middle Kingdom is indeed the focus of investors’ attention on Monday, as cases of Covid-19 multiply and at the same time hundreds of demonstrators protested against the government’s zero-Covid policy which imposes conditions of drastic lives to the inhabitants.

The CAC 40 thus yielded 0.7% to 6665.20 points on Monday evening, after having lost more than 1% to 6641.30 points at the lowest of the session. On Friday, the Parisian index ended up a symbolic 0.08%, enough to post an eighth week in a row in the green.

On Monday, the daily number of cases reached a historic high of 40,000, while the number of people in close contact with an infected person exceeded 1.3 million, underlines UBS.

“It is also worrying that the increase in infections has been widespread, so this wave could have more impact than that of April, in which cases were concentrated in Shanghai,” notes the Swiss bank.

Oil at near-year lows

Restrictions are increasing. Beijing has closed parks and museums, Shanghai is banning newcomers to the city from going to restaurants, markets or malls for the next five days.

Extremely rare, a wave of protests developed this weekend in major cities, with demonstrators expressing their dissatisfaction with the measures. According to AFP, this mobilization seems to be the largest since the pro-democracy riots of 1989, marked by the repression in Tiananmen Square.

“It will take time to understand the impact of public opposition to Covid restrictions and the official response [du gouvernement, NDLR] but [ces] latest developments add uncertainty for foreign investors and could weigh on market sentiment, UBS said.

On the monetary front, European Central Bank President Christine Lagarde would be “surprised” to see euro zone inflation peak. Statements that suggest that the ongoing monetary tightening will continue.

After losing 3% to near year-to-date lows, the North Sea Brent crude contract for January delivery climbed 0.3% to $83.94 a barrel. The WTI listed in New York for the same maturity regained 0.7% to 76.81 dollars a barrel. The price of a barrel of oil remains dependent on the health situation of the second world economy. On foreign exchange, the euro lost some ground to 1.0385 dollars.

Airbus grounded

Unsurprisingly, stocks linked to oil prices were under pressure, TotalEnergies lost 1.2% when Vallourec lost 1.5%.

The biggest drop of the day in the CAC 40, we find Airbus (-5.7%) while Reuters reported on Friday evening that the group would prepare to postpone deliveries of medium-haul aircraft scheduled for 2023. Transparency on Airbus orders and deliveries on a monthly basis. We do not comment on speculation on intermediate figures”, reacted Airbus in a statement sent to several media including BFM Bourse.

After a resounding start to the session, Casino closed slightly down 0.45% after selling part of its business in Brazil to reduce the weight of its debt.

LDC, the parent company of the chickens of Loué fell by 0.45% after having gained 15% over the last three sessions. The title benefited at the end of the week from the publication of its excellent half-years.

Sabrina Sadgui – ©2022 BFM Bourse



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