The Paris Stock Exchange continues to decline against a backdrop of renewed tensions between Beijing and Washington around Taiwan, which China has always considered to be an integral part of its territory. Combined with the worsening fears about global growth, this tug of war put an end to the renewed interest in risky assets which enabled the main European and American indices to sign their best performance since 2020 in July.
Mid-session, the Bedroom 40 lost 0.70% to 6,391.50 points in a business volume of 647 million euros. The contracts future on American indices yield between 0.5% and 1%.
The Asian markets, and in particular Chinese, folded on Tuesday following information from the Liberty Times according to which the Speaker of the United States House of Representatives, Nancy Pelosi, who has started a tour of Asia, should land in Taiwan this Tuesday at 10:30 p.m. local time. She could on this occasion meet President Tsai Ingwen as part of a visit of an unequaled level on the part of an American parliamentarian on the island for 25 years.
The Taiwan Strait overflown by Chinese fighters
China has warned the United States of the consequences of such a visit. Several Chinese fighter jets flew over an area near the Taiwan Strait demarcation line this morning, according to an island official familiar with the operations quoted by the FinancialTimes. ” All eyes will be on the Chinese military to see how they react if Pelosi does indeed go to Taiwan wrote Edward Moya, market analyst at Oanda, in a note early this morning.
Semiconductor manufacturers are among the main victims of these tensions since the bulk of chip production comes from Asia. The European Stoxx 600 technology index dropped 1.8%. STMicroelectronics lose 1%, Infineon Technologies 1.7% and ASML 2.6%.
Sensitive to the political and economic situation in China, the luxury sector is falling back. LVMH loses 1.9%, Kering 1.5% and Hermes 1%.
On the contrary, the values related to defense are circled. Thales thus takes 1% and Dassault Aviation 1.5%.
On the sovereign debt front, the yield on the US 10-year bond hit a four-month low of 2.4982% this morning (bond prices rise when their yield falls) on the back of a “flight to quality”. The bond market is supported by the hope that the slowdown in activity in the United States could encourage the Fed to be less “hawkish”, while playing its role of safe haven investment before Nancy Pelosi’s possible visit to Taiwan .
Bouygues confirms its forecasts
Bouygues takes 0.7%. The construction and telecommunications group has confirmed its financial objectives for 2022 after half-year results above analysts’ expectations. Its subsidiary Bouygues Telecom, for its part, modified its annual outlook, notably raising its growth target for EBITDA (gross operating surplus).
At the SRD, Vilmorin earns 5.5%. The seed company published a turnover up 6.2% like-for-like for the 2021-2022 financial year and raised its annual forecasts after having lowered them in May.
ADP increased by 1.8%. HSBC raised its recommendation on the airport operator’s title from “lighten” to “keep”. Conversely, Societe Generale downgraded Nexans from “buy” to “keep”. The action of the cable manufacturer lost 1.4%.
Finally, Exclusive Networks takes 5.9%. The provider of cybersecurity services and technologies for companies saw its turnover pass the billion euro mark for the first time in its history.