The Paris Stock Exchange continues its rebound in the first exchanges thanks to the hopes raised by the prospect of discussions between Russia and Ukraine. Oil prices are heading back down in this regard, even if the continuation of Russian military operations in the country leaves investors skeptical. The market is therefore preparing for another session of high volatility.
At 9:15 a.m., the Bedroom 40 gained 0.66% to 6,301.71 points.
Banking and automotive stocks are again in the spotlight. BNP Paribas, Agricultural credit and Societe Generale earn between 2.4% and 3.2%, while Stellantis takes 2.8% and Valeo 5%. Danone wins 3.1%. Bernstein raised its recommendation on the agri-food group from “online performance” to “outperformance” and raised its price target from 54 to 56 euros.
Conversely, Sanofi down 5%. The group announced that the Phase 2 AMEERA-3 trial evaluating amcenestrant in the treatment of advanced or metastatic breast cancer failed to meet its primary endpoint of improved patient survival without disease progression. EDF loses 1.5%. The electrician estimates the negative impact on its gross operating surplus (Ebitda) of the drop in production in 2022 compared to 2021 at around 16 billion euros. In February, this impact was estimated at around 11 billion euros. euros.
Russian debt default fears
Ukrainian officials have confirmed that a videoconference will be held on Monday morning with their Russian counterparts. Both delegations had previously reported progress in the discussions. While Russian missiles hit a base of the Ukrainian army located about twenty kilometers from the Polish border, the two parties are nevertheless optimistic in the possibility of an advance. The effects of Western sanctions against Russia are also beginning to be felt and some fear a default by the country on its debt, while Moscow is due to pay bond coupons this week.
Meanwhile, White House National Security Advisor Jake Sullivan is set to meet Yang Jieichi, a senior Chinese diplomat in Rome today. This meeting comes at a time when, according to Washington, Moscow has requested assistance in military equipment from Beijing.
The city of Shenzhen totally confined
Chinese markets fell sharply this morning, weakened by technology stocks in the face of the risk of withdrawal of several companies from the US listing sector. The resurgence of coronavirus infections has also prompted the authorities to place the 17.5 million inhabitants of the city of Shenzhen in total confinement for at least a week. Supplier of Apple, Foxconn has also announced the total cessation of its production in its factories located in the region. This situation reinforces fears about the country’s growth and fuels expectations of new support measures from the Chinese central bank.
Bond markets also remain under pressure, with strong commodity prices adding to inflationary pressures two days before the US Federal Reserve’s interest rate decision. The market expects a rise of at least 25 basis points in the Fed funds rate on Wednesday.
Others should follow and investors will be watching the Fed’s new economic projections, as well as the updating of its expectations concerning the evolution of interest rates, the famous “dot plot”. The yield on the 10-year US bond rose above 2% in Asia this morning, while that of the 5-year bond crossed this same threshold for the first time since May 2019.