The control room of Euronext, the company that manages the Paris Stock Exchange (AFP/Archives/ERIC PIERMONT)
The Paris Stock Exchange ended sharply down 1.59% on Thursday, weighed down by the luxury sector and suffering the blow after numerous announcements of monetary policy decisions suggesting that rates will remain high for a long time.
The CAC 40 index dropped 116.89 points to 7,213.90 points, the day after an increase of 0.67%.
On Wednesday evening, after the European markets closed, the most powerful central bank, the American Federal Reserve (Fed), announced that it would maintain its rates at their current level, without closing the door to an additional increase by the end of 2023.
A decision widely expected by analysts, but the “Fed still surprised the market by adopting a firmer tone than anticipated”, comments to AFP Anne Beaudu, bond manager at Amundi, who adds that “the revision of rate forecasts for the next two years” also took investors by surprise “with fewer cuts than previously expected”.
During Thursday’s session, market participants learned about the decisions of the central banks of the United Kingdom, Switzerland, Norway, Sweden and Turkey.
The Bank of England (BoE) created a surprise by maintaining its key rates at their current level of 5.25%, marking a first pause since the start of its cycle of rate increases launched in December 2021.
On the bond market, yields on government bonds have reached their highest levels for several years: the American ten-year interest rate has reached a new high since 2007 at 4.49%, the German equivalent has climbed to at 2.77%, the highest since 2011, and the French ten-year exceeded 3.30%, a record since the end of 2012.
The two-year French interest rate, for its part, was at its highest since 2008 at 3.55%.
A further rise in oil prices has also revived investors’ fears that inflation is moving away from the slowdown scenarios forecast by central banks.
Luxury in decline
The luxury sector appears in bright red on Thursday, penalized in particular by a note from Oddo BHF which observes a “slowdown affecting all players”.
Oddo BHF analysts believe in particular that their expectations for Hermès and Moncler were too high and have lowered their recommendation. Hermès shares fell 5.85% to 1,766.60 euros, LVMH lost 1% to 729.30 euros and Kering 0.87% to 453.60 euros.
Also present in the sector, the cosmetics giant L’Oréal lost 2.51% to 399.70 euros.
© 2023 AFP
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