(BFM Bourse) – The Paris Stock Exchange has suffered a sixth consecutive session of decline, the markets are worried about the repercussions of the rise in oil prices. The CAC 40 lost 0.8%, back below 7200 points, also undermined by its luxury sector.
And six. The Paris Stock Exchange continues a sixth session of decline in the absence of encouraging news on the front of the economy. Inflationary tensions, linked to the recent surge in black gold prices are weighing on the mood of the markets and further fueling fears of recession. In this unattractive context, the CAC 40 continued its slide and lost 0.84% to finish its race below 7200 points at 7194.09 points.
Despite an acceleration in activity in services in the United States in August to 54.5 points – which contrasts with the latest similar statistics published for China and the euro zone – the mood is gloomy. Moreover, the latest ISM report on services activity in the United States suggests an acceleration in the prices paid by companies to their suppliers. The price paid sub-index indeed rose to 58.9 points against 56.8 points in July.
In this context, the American Federal Reserve will unveil its Beige Book at 8 p.m., a document which draws up a state of the economic situation in the United States, before the monetary policy meeting of September 19 and 20. And the forecasts are for rates to remain within a limit of between 5.25% and 5.5%, according to the FedWatch tool. An overwhelming majority (91%) envisages this scenario and that the American institution imitates its Canadian neighbour. The Canadian Central Bank indeed decided on Wednesday to keep its main key rate unchanged at 5%, at its highest level for 22 years, judging that the country’s economy had entered a period of “lower growth”.
The rise in the price of black gold is also putting a spoke in the wheels of central banks in their relentless fight against inflation. “For central banks, rising oil prices are complicating the picture, although as it stands we still think the Fed and the ECB (US Federal Reserve and European Central Bank) should give each other time and maintain their rates unchanged by the end of the year”, judge Xavier Chapard of LBPAM.
Saudi Arabia has indeed decided to maintain its production cuts for three months. This briefly allowed the North Sea Brent contract to return to 90 dollars a barrel.
Because of this decision “investors are becoming worried about inflation expectations,” said Stephen Innes of Spi Asset Management.
Worthwhile luxury
As for values, Renault gained 1.5% while Stellantis limited its gains to 0.1% while Exane BNP Paribas raised its price targets on both values.
On the other hand, luxury is still not in great shape and is at the top of the biggest declines in the Parisian market this Wednesday evening. LVMH dropped 3.6%, Kering lost 2.3% and Hermès returned 1.9%, penalized by an HSBC note on the sector as well as comments by the boss of Richemont on the state of demand for luxury products.
Moreover, it is this same Richemont who weighed on Interparfums. The title dropped 9.4%, bent under the fears of investors concerning the appointment of Boet Brinkgreve, at the head of a new division created by Richemont, which could call into question in the long term the licenses granted to the French group.
On the side of the smallest values, the manufacturer of boxes for electronics Egide gained 2.7% after completing a capital increase which should allow it to restore its finances.
On other markets, the euro fell slightly against the dollar, by 0.1% to 1.0713 dollars. On the oil price side, November’s North Sea Brent contract was nearly flat at $90 a barrel, while October’s New York-listed WTI contract rose 0.2% to 86, $88 a barrel.
Sabrina Sadgui – ©2023 BFM Bourse