Cac 40: Weighed down by the Fed and the sluggishness of activity in the euro zone, the CAC 40 lost 2.6% over the week


(BFM Bourse) – The Parisian market put an end to five days marked by announcements from central banks. Dull PMI indices in the euro zone this Friday and especially the desire displayed by the Fed to maintain its rates at high levels have battered the market.

The week of central banks was not very pleasant for the Paris Stock Exchange. The CAC 40 ended this Friday’s session with an innocuous drop of 0.4% to 7184.82 points, but above all dropped 2.6% over five days.

The flagship index of the Paris Stock Exchange suffered in particular on Monday (-1.4%), weighed down by the rise in oil prices and the fall in Société Générale shares, as well as on Thursday (-1.59%), when the The market has absorbed the shock of the decisions of the American Federal Reserve (Fed).

The US central bank kept its rates unchanged, but its members’ economic projections (“dot plots”) showed that these same members anticipated rate cuts of only 0.5 percentage points next year, compared to 1 point in previous forecasts.

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Restrictive monetary policies

“The essential message from central bankers on both sides of the Atlantic was to tell us that monetary policies had to remain restrictive for some time to ensure that inflation converges towards targets,” notes Sebastian Paris Horvitz of LBPAM.

“The reaction of the stock markets over the last few days has been very negative, especially since the bond market has pushed long-term rates to new heights. The coming days will tell us whether these dynamics persist,” he underlines. Moreover.

To return to this Friday’s session, the sluggishness of private sector activity in the euro zone, measured by the PMI indices, did little to reassure investors.

The composite PMI index – which brings together the manufacturing industry and services – stood at 47.1 points in September after 46.7 points in August. In France, private sector activity deteriorated to a three-year low, at 43.5 points in September after 46 points in August. An index below 50 marks a contraction in activity.

“The slight increase in the Eurozone composite PMI index in September kept it in contraction territory. We believe that a further contraction in activity is expected for the rest of the year,” explains Capital Economics.

Ubisoft had a good session

The Bank of Japan, the last central bank to publish its monetary policy decision this week after those of the United States, Turkey, Switzerland, Norway, the United Kingdom and Sweden, has maintained its rates unchanged, despite a price increase of 3.1% year-on-year in August. This weighs on the yen which falls by 0.3% against the dollar.

On the value side, Ubisoft increased by 4.5%, the near finalization of the acquisition of Activision by Microsoft opens up great prospects for the French publisher with the recovery of “cloud streaming” rights to very attractive licenses, such as the “Call of Duty” franchise.

On the other hand, Solutions 30 plunged 16.8% after disappointing its half-year accounts.

Akwel gained 3.12%, propelled by its improved profitability in the first half.

Kering also increased by 1.5% while Sabato de Sarno, creative director of Gucci, presented his first collection for the Italian label this Friday at Milan fashion week.

Note that Dutch banks, such as ING (-6%), were weighed down by the green light from Dutch MPs for an increase in the tax on banks.

On the foreign exchange market, the euro is stable against the dollar at 1.0664 dollars (+0.04%). On the oil side, prices remain on an upward trend after Russia’s decision to temporarily ban exports of gasoline and diesel to all countries, with the exception of Belarus, Kazakhstan, Armenia and Kyrgyzstan. A barrel of Brent from the North Sea for delivery in November rose 0.3% to $93.53 around 5:40 p.m., while a barrel of WTI for delivery in November also rose 0.56% to $90.09.

Julien Marion – ©2023 BFM Bourse


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