Paris Stock Exchange ends down, penalized by the fall of Hermès

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The control room of Euronext, the company that manages the Paris Stock Exchange (AFP/Archives/ERIC PIERMONT)

The Paris Stock Exchange closed down sharply by 0.92% on Thursday, penalized as the day before by the luxury sector, in a wait-and-see market before the publication of a report on employment in the United States on Friday.

The leading CAC 40 index stood at 7,431.96 points, its lowest level since August 15. On Wednesday, it had lost 0.98% to 7,500.97 points.

“The session was relatively calm on the surface, however, within the indices there were big movements in stocks,” comments Charles de Riedmatten, equity manager at Myria AM.

On the CAC 40, the luxury group Hermès fell by 6.42% to 1,947.50 euros, dragging the entire sector, a heavyweight on the stock market, with it. LVMH, the leading stock market capitalization on the leading index, fell by 3.64% to 619.20 euros and Kering lost 1.43% to 244.95 euros.

The fall of Hermès comes after an analyst “lowered his outlook for the group’s growth” and pointed out “pressure on its operating margins”, the manager explained.

This revision of the Hermès share price comes at a time when the entire sector is already suffering from “concerns about the economic situation”, both in China and in the United States, added Charles de Riedmatten.

The French stock market session was also marked by the appointment of the former minister and right-wing European Commissioner Michel Barnier as Prime Minister, 60 days after the second round of legislative elections which resulted in a National Assembly without an absolute majority.

The news, however, did not cause any major reaction on the stock market index.

The market is mainly waiting for the publication of a report on employment in the United States.

– Fears of recession –

Since Fed Chairman Jerome Powell said he was concerned about the US labor market, all employment indicators have been scrutinized.

Indeed, to slow down inflation, the American monetary institution has raised its rates to a particularly high level, but this weighs on economic activity in the United States. The Fed now wants to avoid causing unemployment to rise too much, while continuing its mission to bring inflation back to its 2% target.

“In a scenario where the Fed cuts 50 basis points (in its rates) in September, this will mean that it believes that economic conditions in the United States are deteriorating more quickly than it initially thought. A 25-point cut would mean that it remains confident in a soft landing for the American economy,” explains the manager.

If Friday’s publication reveals a “higher unemployment rate than expected by the consensus, this will very strongly raise fears of recession in the United States,” explains Charles de Riedmatten.

© 2024 AFP

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