The control room of Euronext, the company that manages the Paris Stock Exchange (AFP / Eric PIERMONT)
The Paris Bourse continued its decline on Monday as the energy crisis threatens to plunge Europe into recession and puts the euro under pressure.
The CAC 40 index lost 1.80%, or 117.09 points to 6,378.74 points after having already ended down on Friday (-0.94%).
The market is focused on “gas prices and central banks, with the Jackson Hole meeting at the end of the week which generates a lot of stress”, indicates to AFP Alexandre Hezez, strategist of the Richelieu Group.
At this symposium of central bankers, investors hope to learn more about the next rate hike from the US central bank (Fed) which should take place in September.
Meanwhile, natural gas prices have continued to climb, still propelled by news of a temporary halt in Russian gas deliveries via Nord Stream 1, rekindling fears that the energy crisis in Europe is worsening.
Russian gas giant Gazprom announced on Friday that its deliveries of Russian gas to Europe through the Nord Stream 1 gas pipeline would be interrupted for three days, from August 31 to September 2, for “maintenance” reasons.
“We have seen gas prices practically double since the end of June and we are seeing the repercussions: industrials are suffering the most” and investors “are struggling to imagine a catalyst that would lower gas prices other than negotiations with Russia , a ceasefire,” observes Mr. Hezez.
At the same time, the euro sank below parity with the dollar on Monday, to a level not seen since the year it was put into circulation. The euro zone currency lost 0.91% around 4:35 p.m. GMT to 0.9947 dollars.
We are, according to Mr. Hezez, “in an extremely problematic situation with gas prices in Europe” and the prospect of possible supply cuts which would put certain industries in the euro zone in difficulty.
“With a session like today, investors are worried that there will be even more inflation and even more risks of recession, a bad mix”, adds the expert.
All risky assets took a hit, especially industrial stocks including Schneider Electric (-4.40%), Legrand (-3.58%), Saint-Gobain (-3.44%), Renault (-4.42 %) and Stellantis (-4.02%).
On the other hand, Sanofi (+1.62%) and TotalEnergies (+0.66%) are among the very few stocks that ended in the green.
© 2022 AFP
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