(BFM Bourse) – The Parisian index dropped 2.3% on Friday to end this tough week below 5,800 points, while the markets are worried about the risk of recession induced by a fierce fight by central banks against record inflation. The CAC 40 lost nearly 5% weekly.
Don’t throw any more! Between the renewed tensions in the Ukrainian conflict, the announcements of the American Federal Reserve and the prospect of a recession, the Paris Bourse ends this tough week completely washed out to fall to its lowest closing level since February 25, 2021.
The CAC 40 thus ends the day on Friday down sharply by 2.28% to 5,783.41 points, after having registered a low in the session at 5,765.65 points shortly before 4:00 p.m. Over the week as a whole, the Parisian index returned 4.8% and more than 20% compared to its zenith on January 5.
On Wall Street, the atmosphere is also feverish, the Dow Jones restored 1.4%, the Nasdaq lost 1.5% while the S&P fell 1.7% at the close of European stock markets. The fight against inflation will therefore increasingly be at the cost of a recession. A scenario that is far from reassuring investors…
“The majority of the major central banks continue their fantastic ride to fight against inflationary pressures. The race to tighten monetary policy can be described as historic in its scale and speed”, underlines Sebastian Paris Horvitz, of La Banque Postale Asset Management.
“With Wednesday’s sharp rate hike set to continue throughout the year in the U.S. (and globally) then the question arises as to what the real economy’s impact will be.” his side John Plassard, investment specialist at Mirabaud.
Fears of an upcoming recession in the euro zone are materializing over the statistics. The Eurozone PMIs, which measure private sector activity in the monetary union, were hardly encouraging. The composite index, which includes manufacturing activity and services, stood at 48.2 in September, a 20-month low. As a reminder, a PMI below 50 indicates a contraction in activity, above 50 its expansion. “The September PMI surveys are consistent with a slight decline in eurozone GDP in the third quarter,” Capital Economics said.
The blues of black gold
Moreover, fears of recession at the global level are causing oil prices to bend. WTI was trading below $80 for the first time since January while North Sea Brent fell almost 5% to $86, with prices of the two global benchmarks also weighed down by the strength of the dollar against major currencies. .
Oil stocks are at the forefront of this bout of weakness, TotalEnergies dropped 5%, Vallourec lost 5.3% and CGG dropped 6.7%.
As for the other values, few survivors to report except M6 which for its part was headlining this session. The former small, up-and-coming channel gained 8.1%, still benefiting from renewed speculative interest as its owner RTL Group decided to put its 48% stake in the French audiovisual group up for sale.
Airbus showed resistance (-0.4%) after the management of the aeronautical group pledged to improve shareholder return, citing possible share buybacks.
Automotive suppliers skated throughout the session. Faurecia lost 11.5%, Valeo dropped 10.25% while Akwel, which published sharply lower half-year results, ended down 4%.
On the small and mid-cap side, business transformation advisory group Micropole plunged more than 14% as its half-year results were chipped away by the costs needed to attract talent.
On the foreign exchange market, the euro fell 1.20% against the dollar, to 0.9717 dollars, a 20-year low, the greenback benefiting from its status as a safe haven. The pound fell below the symbolic threshold of 1.10 dollars on Friday after budget announcements deemed costly for public finances.
Sabrina Sadgui – ©2022 BFM Bourse