(BFM Bourse) – The determination displayed by the Russian regime to continue the offensive in Ukraine, regardless of the sanctions brandished by the international community, led to new massive sales on Tuesday. The tricolor CAC 40 fell by 3.94%, narrowly missing the biggest drop of the year at this stage.
Regardless of the international condemnations and the painful sanctions that should plunge the Russian economy into deep recession, Moscow obviously does not intend to backtrack. As the Ukrainian army faces a new offensive by Russian forces on Kyiv, Kharkiv and several other cities in the country on Tuesday, the day after fruitless talks, Russia said, through its Defense Minister Sergei Shoigu , that it would continue the offensive “until all objectives are achieved”, namely the “demilitarization” and “denazification” of Ukraine in Moscow’s terms. This new escalation, accompanied by indiscriminate strikes further increasing the civilian toll, has caused a new decline in European stock markets.
After having yet started the day close to balance, the Paris Stock Exchange closed at 6,396.49 points, a fall of 3.94%. While not the biggest drop of 2022, this move comes pretty close, as the worst performance so far was the 3.97% drop that occurred on January 24 as investors began to worry about a possible Russian military intervention in Ukraine “in the coming days or weeks”, as warned then the American intelligence services.
The meeting between Ukrainian and Russian officials at the Belarusian border on Monday was inconclusive, but they agreed to meet again. That was enough for the market to try to recover at the open, but hopes quickly faded as hostilities continued.
Visibly much more severe and rapid than expected by Vladimir Putin’s regime, and shared even by resolutely neutral countries such as Switzerland, Western sanctions aim to isolate the country’s economy, challenging Russia to free itself relations with its partners – even if this also has a price for the West.
TotalEnergies and Engie in the sights of the French State
Asked about the activities of the French giants TotalEnergies and Engie in Russia, the Minister of the Economy Bruno Le Maire affirmed that there was now a “problem of principle to work with” with any personality close to the Russian power, estimated the minister of Economy Bruno Le Maire. Part of the Nord Stream 2 gas pipeline program, suspended by Germany, Engie plunged 7.3% at 11:25 a.m. Involved in several natural gas projects, notably with Novatek (in which it is an 18.9% shareholder), TotalEnergies lost an additional 2% even as oil prices continued to rise. Engie plummeted by more than 13%, the minister also indicating that it was a question of discussing its contribution to the Nord Stream 2 project.
Balanced at the start of the session, the CAC’s prize list then turned sharply red. Among the few stocks on the rise, Thales gained another 5.1%, followed by ArcelorMittal (+2.4%) and Teleperformance (+0.2%). On the other side, the groups most exposed to Russia have once again suffered. In addition to Engie and TotalEnergies, Renault, which shut down its Moscow factories this week, fell by 11% and Societe Generale by 9.4%.
Fearing the effects of a shortage of titanium, a metal widely used in aviation and of which Russia is a major producer, investors have also sanctioned the aeronautics sector (Safran -9.6%, Airbus -9.3%).
The entire automotive sector also suffered from another sluggish month, with new car registrations registering a ninth consecutive month of decline in France in February (-13.1% over one year), still hampered by the shortage electronic chips. In addition to Renault, Faurecia (-13.6%), Plastic Omnium (-6.9%), Valeo (-8.8%) without forgetting Stellantis (-7%) and Michelin (-4%) sank on Tuesday.
In the rest of the news, Atos disappointed investors again with results below expectations, particularly in terms of operating margin, and lost 20%.
Valneva and Cerinnov among the few survivors of the session
The Franco-Austrian biotech Valneva was able to grab 2.1% after obtaining its very first authorization from a health authority for its anti-Covid vaccine, in Bahrain, which has already pre-ordered a million doses. .
The supplier of robotic equipment to ceramics and glass manufacturers Cerinnov has for its part regained 5%, admittedly after a disastrous journey since its IPO, having returned to solid growth in 2021.
The barrel at more than 110 dollars
Suspended by the war in Ukraine and the sanctions raining down on Russia, the world’s second largest exporter of black gold, crude oil prices ignited even more on Tuesday. The futures contract on a barrel of American crude oil (WTI) jumped 11% to 106.32 dollars and Brent reached 107.19 dollars (+9.41%).
On the currency market, finally, traders are turning again and again to the greenback, an excellent safe haven, and the single currency thus dropped more than 1% to 1.1104 dollars.
Among other assets, the ounce of gold rose to 1937.10 dollars (+ 1.92%) while Bitcoin quickly approached 45,000 dollars, up 4.56% to 43,548 dollars.
Guillaume Bayre – ©2022 BFM Bourse