(BFM Bourse) – The support that the Chinese central bank has decided to grant, by operating the largest rate cut since 2019, kicked off a weekend recovery for the indices as well in Asia than in Europe. The CAC 40 rose by 1.4% but some volatility is still possible in this session of the three witches.
The policy of the various Chinese decision-makers has largely disconcerted, not to say disappointed, investors for the past few quarters, between the blows of the rule on the fingers of local new technology players and the current pursuit of an elusive zero-Covid objective at the prices of severe lockdowns heavily hampering economic activity, as statistics from last March and April showed. The People’s Bank of China, the central bank of the world’s second largest economy, now seems determined to be more active in supporting growth.
Unexpectedly, it announced to reduce one of its main key rates, serving as a reference for commercial banks for mortgages from 4.6% to 4.45%. A fairly targeted measure, but the gesture is notable since it is the deepest easing applied since this rate joined the PBC’s arsenal in 2019, raising hopes that the next gesture will be a more marked easing of global monetary policy… Be that as it may, operators are finding a little hope to cling to and are returning to risky assets. After gains of the same order in Shanghai this Friday morning, the CAC 40 rose 1.38% to 6,358.98 points around 12:35 p.m. in a lively market. More than 1.1 billion euros have already changed hands in this session of the three witches, a monthly payment which brings a little animation (not as much as the four witches, which only pass once per quarter).
In Paris, cyclical stocks and in particular the automobile are benefiting from this with a 4% increase for Stellantis, +3.8% for Renault and +3% for Michelin, or +5.6% for Valeo.
Oil on the rise
For its part, Air-France KLM is also benefiting from the announcement of a contribution of 500 million euros in new money via the opening of the capital of a subsidiary dedicated to engines to the Apollo fund.
Punished the day before the announcement of its plan to significantly increase its stake in the capital of Elior, Derichebourg rose 2.1%, while EDF took 2.4% after announcing a new delay in the schedule for the construction of new reactors at Hinkley Point in Great Britain.
China’s credit easing boosted oil prices from $106 to $112 during the Asian session, with Brent and WTI now trading at the same price within a few cents (112 .02 for a barrel of Texan crude, 112.20 dollars for that of the North Sea). TotalEnergies rose by 1.5% and Vallourec took off by 8%.
On the exchange side, the euro/dollar parity is changing little at 1.0592.
Guillaume Bayre – ©2022 BFM Bourse