The Paris Stock Exchange is marking time after its progression the day before, the risk of an energy crisis in Europe rekindling fears of recession. The confirmation of a record inflation rate of 8.6% over one year in June in the euro zone, confirms the need for the European Central Bank to raise its interest rates on Thursday for the first time in 11 years . Good performance of contracts future on American indices after the decline of Wall Street the day before nevertheless allows the market to limit its losses.
Mid-session, the Bedroom 40 lost 0.24% to 6,077.54 points in a business volume of 530 million euros. The market remains prey to high volatility at the start of the second quarter earnings season, in Europe and the United States.
The prospect of an energy shortage in Europe was highlighted by an article in the FinancialTimes that the European Union is preparing to ask member countries to reduce their gas consumption “immediately”. The daily adds that without an increase in reserves, the Old Continent risks running out of gas this winter.
The ECB could be more aggressive than expected
The European Central Bank is preparing to raise its interest rates on Thursday for the first time since 2011. It could opt on this occasion for an increase of 50 basis points, or double what was announced last month, reports Bloomberg, citing sources familiar with the discussions.
With this in mind, the euro is strengthening to $1.0260 after briefly dipping below parity last Friday for the first time in 20 years. The yield on government bonds tends like the 10-year German Bund (+3 basis points to 1.2410%) which serves as a benchmark within the euro zone.
Last night, Apple said it would limit hiring and investment in several key areas next year in anticipation of an economic slowdown. European suppliers of the Apple brand are generally down, which weighs on the Stoxx 600 technology, which shows the largest decline in Europe (-1%). In Paris, STMicroelectronics loses 1.9%.
The State offers 12 euros per EDF share
EDF, whose quotation resumed on Tuesday, rose by nearly 15%. The French government has announced that it plans to launch an offer at 12 euros per share on the balance of the capital of the electrician that it does not yet hold with a view to delisting it. It will also offer 15.64 euros per Oceane (bond convertible into new or existing shares).
Its competitor Engie gains 1.3% and the Stoxx 600 of “utilities” takes 0.9%.
Alstom fell 6% after the announcement of revenues and orders for the first quarter of its financial year at the end of March 2023 broadly in line with analysts’ forecasts. Several analysts also point out that the title of the railway equipment manufacturer has outperformed in recent days. The group confirmed its objectives for the full year, while recalling that inflation and shortages of components will have an impact on its activity.
ADP appreciated by 2.1%. The airport operator raised its traffic assumptions for 2022 while in the first half, its traffic reached 118.2 million passengers, including 37.5 million for Paris Aéroport, respective increases of 71.9% and 71, 6% compared to the corresponding period of 2019.
Neoen gives up 5.6%. Morgan Stanley downgraded the renewable energy producer’s stock from “line weight” to “underweight” over valuation concerns. The broker also lowered its recommendation on Voltalia (-3.7%) from “overweight” to “line weight”.