(BFM Bourse) – The CAC 40 fell 0.6% at the close on Wednesday as the optimism linked to the reopening of the Chinese economy fell well and investors now fear that the measures taken by Beijing will fuel the ‘inflation. Early trading on Wall Street weighed on the trend.
The excitement is now over. After recording good progress on Tuesday, the CAC 40 stalled on Wednesday and ended down 0.61% at 6,510.49 points, in anemic trading volumes.
While investors initially appreciated Beijing’s announcement of the lifting of the quarantine for people arriving on Chinese territory from January 8, this measure now raises fears of new inflationary pressures which would further push central banks not to ease off on key rate hikes.
“This is bad news for inflation,” said Ipek Ozkardeskaya, of Swissquote Bank, quoted by AFP, because the Chinese economic recovery should lead to an increase in demand and therefore “in energy and raw materials prices first”.
Wall Street hurt
Several countries, including Italy, have also announced their intention to impose tests on travelers from China. The United States is also considering restrictions.
The surge in Covid-19 contaminations in China is another reason for concern for the market.
“Many reports suggest that Covid cases are on the rise in China, which really threatens the global supply chain”, underlines Naeem Aslam, analyst at AvaTrade.
Weak in the middle of the day, the Paris Stock Exchange sharply accelerated its decline with the start of the session in the red of Wall Street which clearly weighed on the trend.
At the same time, bond yields continue to rise and the 10-year French bond rate is now above 3%.
AB Science has distinguished itself
In this gloomy context, few values have moved up on the CAC 40, the strongest increase being signed by Eurofins which was awarded barely 0.8%. The movements, however, remained contained since the most significant drop, of 1.5%, was charged by Engie.
The rise in rates weighed on the securities of indebted companies such as Casino (-1%) and Air France-KLM (-2.6%)
On the smaller-cap side, AB Science jumped more than 12% after mastinib, its molecule for treating amyotrophic lateral sclerosis, obtained orphan drug designation from the Swiss Institute for Therapeutic Products.
On other markets, the euro fell 0.1% against the dollar, to 1.0618 dollars. Oil prices fell in the afternoon. The contract on Brent from the North Sea for delivery in February dropped 2.3% to 82.69 dollars a barrel while that of the same term on WTI in New York lost 2.5% to 77.52 dollars a barrel.
Julien Marion – ©2022 BFM Bourse