The Paris Stock Exchange is starting to fall again and Wall Street is falling after its sharp rise the day before. The risks related to the war in Ukraine, and in particular the rise in oil prices, are regaining the upper hand. During his speech by videoconference to French deputies and senators on Wednesday, Volodymyr Zelensky called on Parliament to observe a minute of silence in tribute to the victims of the war in Ukraine. He said he was grateful for President Macron’s efforts to end hostilities and called on French companies to leave Russia. He also asked for increased aid in military equipment as tomorrow will be a month since the war began.
For its part, Russia has reduced its oil supplies via the CPC consortium pipeline (Caspian consortium pipeline) which connects Central Asia to the Black Sea due to damage caused by a storm, according to a press release from the deputy minister. Russian Energy, relayed by the Tass agency. Up to 1 million barrels per day could be impacted for about two months, the statement said. The barrel of Brent from the North Sea rose by more than 5.2% to 121.45 dollars.
Around 4 p.m., the Bedroom 40 fell by 1.12% to 6,584.96 points in a business volume of 1.76 billion euros. In New York, the Dow Jones loses 0.73% and the Nasdaq Composite 0.35%.
Joe Biden on European tour
This interruption comes as Joe Biden begins a trip to Europe on Wednesday to try to convince his partners to adopt new sanctions against Moscow. However, German Chancellor Olaf Scholz remains opposed to an embargo on Russian gas and oil, according to Die Zeit. The American president will take part in an extraordinary NATO summit in Brussels on Thursday, but also at the G7 summit and the European Council before going to Poland on Friday.
At the same time, the market is trying to assess the consequences of the change in tone adopted by the Federal Reserve and its consequences on the bond markets. Jerome Powell was in favor of an acceleration of the normalization of American monetary policy while inflation reached a 40-year high of 7.9% in February in the United States. This determination seems to reassure investors while propelling bond yields to levels not seen in at least three years. The yield on the 10-year US bond fell by around 2 basis points to 2.36548%, while that of the German Bund of the same maturity fell by the same amount to 0.4870%, while remaining close to 4 year high.
Air Liquide at the top of the Cac 40
While the market hails the Federal Reserve’s determination to fight inflation, the U.S. central bank is simply looking ” to determine the least bad policy in order to rectify the terrible mistake it made by allowing inflation to get so bad notes Ipek Ozkardeskaya, analyst at Swissquote. She adds, however, that the good news is that Jerome Powell has market support, for now. But this support could fade quickly if economic indicators start to dip and corporate earnings slow “.
Closer to home, the Ifo institute lowered its growth forecast for the German economy to a range of 2.2% to 3.1% this year, from 3.7% previously due to the war in Ukraine.
TotalEnergies takes 0.6%. The group says it has decided unilaterally “to no longer conclude or renew contracts for the purchase of Russian petroleum and petroleum products, in order to stop these purchases” as soon as possible and at the latest by the end of 2022 “. The partial withdrawal from Russia will “reduce media pressure” on the group, which remains involved in Yamal LNG, estimates the firm Oddo BHF. The manufacturer of seamless tubes Vallourec takes for its part 2.6%.
Liquid air increased by 1.8%. The group has signed a purchase agreement for 1.2 million shares, or 0.25% of the capital, at a maximum unit price of 200 euros. In addition, Goldman Sachs added the stock to its list of preferred values.
Eramet advance of 3.8% in the wake of nickel prices, which jumped 14% in London, just below the 15% limit set by the LME.
Conversely, banking and automobile stocks suffered releases. BNP Paribas, Agricultural credit and Societe Generale lose around 2%. Renault and Faurecia loose 3% and 4% respectively.