The Paris Stock Exchange posted a symbolic gain in a move seen as a pause in its bearish streak, rather than a real rebound attempt. The Cac 40 has also recorded a new low for the year at 5,736 points after having suffered last week its worst weekly loss since mid-June, entering at the same time in the “bear market” zone. The trend remains weakened by the tightening of the monetary policies of the central banks, the specter of recession and the uncertainties linked to the victory, without surprise, of the alliance of the rights during the legislative elections on Sunday in Italy.
Around 2:30 p.m., the Bedroom 40 gleaned 0.10% to 5,789.05 points in bumpy trades that saw the index move between a gain of 0.77% and a decline of 0.81%. Elsewhere in Europe, the FTSE Eb Milanese takes 0.50% after a fall of 3.4% on Friday. The contracts future on American indices yield between 0.7% and 0.8%.
The coalition formed by Brothers of Italy, Giorgia Meloni, the League, Matteo Salvini and Forza Italia, Silvio Berlusconi, should obtain a comfortable majority in Parliament. With 26% of the vote, according to Rai projections, Giorgia Meloni is well placed to become the first president of the Italian Council. The final results should be known during the day.
Medium-term risks
The next government should not be appointed before October at the earliest and the fact that the League, which has promised to reverse certain reforms initiated by Mario Draghi, obtained only 9% of the vote on Sunday, should limit its influence in the next government. ” In the short term, we believe that the risks of tensions are modest, but they could increase in the medium term. The first priority of the government will be to finalize the finance law for 2023. Due to the short time left to complete it, we believe that the centre-right government will have to rely on the budgetary projections which will be presented by the Draghi government at the end of the month. », summarizes Ludovico Sapio, of Barclays.
The spread (yield difference) between the Italian 10-year bond and the German Bund of the same maturity reached 235 basis points (up 6.7%) on Monday. By comparison, it had fallen below 100 basis points for the first time since 2015 when Mario Draghi took over as head of government in February 2021. But this movement is put into perspective by the tensions observed on the all sovereign debt yields. That of the 10-year German Bund tightened by 7 basis points to 2.0940% and that of the British Gilt of the same maturity by 20 basis points to 4.12%.
On the foreign exchange market, the pound sterling hit an all-time low of 1.035 dollars before stabilizing around 1.08, reinforcing expectations of an emergency interest rate hike by the Bank of England. Britain’s currency fell on Friday following the budget presentation by Finance Minister Kwasi Kwarteng announcing massive tax cuts that will be financed by borrowing. Considered a safe haven in these troubled times, the greenback is strengthening against other currencies, with the euro continuing to evolve around its lowest levels for 20 years.
M6 and Elior make the splits
For its part, the OECD pointed out that the combined consequences of inflation, the war in Ukraine and the energy crisis could cause a recession in most developed countries. Reflecting these fears, the barrel of Brent from the North Sea fell below 85 dollars for the first time since January, before returning to around 85. In Germany, the Ifo business climate index deteriorated more than expected, falling 4.3 points to 84.3 in September, against 87 expected by the market.
M6 rose 5.6% after a jump of more than 10% in early trading. French businessman Stéphane Courbit and his financial partners have offered 20 euros per share to take over the stake of Bertelsmann, parent company of RTL, in the television group, the Bloomberg agency reported on Sunday.
Elior on the contrary, plunged by nearly 22%. Stifel analysts, who maintain their “sell” opinion on the stock, fear that the collective catering group will fail to meet consensus expectations.