(BFM Bourse) – The Paris Stock Exchange ended down, weighed down by Kering whose warning on its income penalized the luxury sector. The CAC 40 gives up 0.48% below 8,200 points
A somewhat complicated session for the Paris Stock Exchange, whose mood was weighed down by Kering’s warning on its income, which penalizes all luxury stocks, whose stock market weight is considerable in the index.
The CAC 40 therefore buckled under the decline of this flagship compartment of the Parisian market, to return below 8,200 points, with a drop of 0.48% to 8,161.41 points this Wednesday evening. It even has the “luxury” of underperforming other European stock markets. It thus erases a good part of its advance from the day before (+0.65%) which had allowed it to close for the first time in its history above 8,200 points, at 8,201.05 points.
Luxury and especially Kering therefore gave investors a cold sweat this Wednesday. The former PPR warned Tuesday evening that its turnover should fall by around 10% on a comparable basis in the first quarter, with a fall of almost 20% for Gucci. As a result, Kering shares experienced one of their worst days in history, ending sharply down 11.9%, after losing more than 15% in early trading. This decline represents a loss of more than 6 billion euros of capitalization in one day, as much as the stock market weight of SEB in Paris.
“The entire sector could be down tomorrow (Wednesday, Editor’s note) due to concerns about a slowdown in China, particularly after the strong performance (stock market of the sector, Editor’s note) since the start of the year, which brought its valuation in line with the 5-year average compared to the market, despite the slowdown in growth”, explains UBS in a note published Tuesday evening.
The LVMH share was swept away by the fall of the Kering share, with a decline of 1.6% when Hermes ended with a symbolic increase of 0.02% to 2,405 euros.
In addition to Kering’s stock market collapse, investors’ attention was focused on the meeting of the American Federal Reserve (Fed), the outcome of which is scheduled for 7 p.m. Paris time. If the market does not expect any change in key rates, investors will watch for comments from its president, Jerome Powell, to detect the slightest clue for the future.
“The main focus will be on updating Fed members’ rate projections, which could indicate only two rate cuts this year although we think it is likely that they indicate three more cuts,” also underlines Xavier Chapard of LBPAM.
Beneteau, all sails out
As for other stocks, Orpea soared by more than 20% as the share consolidation operation ended Thursday evening aimed at removing the stock from the unflattering “penny stock” category. Note that the group will change its name to Emeis in order to turn the page on a stock market rout which began on January 24, 2022, with the release of the investigation book Les Fossoyeurs highlighting facts of mistreatment in its establishments.
Beneteau jumped 8.2% driven by its annual results which pleasantly surprised the markets.
Bureau Veritas gained 2% as the group revealed its medium-term objectives and announced a share buyback program of 200 million euros for this year.
Virbac lost 2.2% following the publication of annual results without much surprise.
On other markets, the euro is almost stable against the dollar at 1.0859 dollars. Oil prices accelerated their decline, after the publication of a more marked decline than expected in weekly oil stocks in the United States. The May contract on Brent from the North Sea dropped 1.75% to 86.48 dollars per barrel, while that of the same maturity on WTI listed in New York plunged 2% to 81.09 dollars per barrel.
Sabrina Sadgui – ©2024 BFM Bourse