After signing its best year since 1999 in 2021, the Paris Bourse is entering 2022 with new highs in the hope that the surge in coronavirus contaminations due to the Omicron variant will not hamper the economic recovery. Growth in manufacturing activity continued in the euro area in December, according to the IHS Markit survey, but at a slower pace than in November. The index was confirmed at 58 points in final data last month, after 58.4 in November, but the slight easing of tensions on supplies encouraged a record increase in purchases.
The good direction of the futures contracts on the three big New York indices is also a factor of support after a jump of nearly 27% of the S&P 500 in 2021. The index most watched by the managers aligned 70 records in 2021. Trading volumes, however, remain symbolic with barely 630 million euros traded on Cac 40 stocks due to the closure of several financial centers on Monday, including the London Stock Exchange.
Around noon, the Cac 40 rose 1.11% to 7,232.42 points after a new record during the session at 7,234.26. In Frankfurt on Dax appreciates by 0.93% and the index Stoxx Europe 600 takes 0.59% after a new historic peak at 491.26 points. The contracts futures March on US indices gained between 0.5% and 0.6%.
Reasonably optimistic markets
In Asia, Tokyo, Sydney and Chinese places are closed on Monday. In Hong Kong, the Hang Seng index fell 0.53% on Monday after losing 14.1% last year, one of the worst performances among the major world markets. Evergrande shares were suspended from listing. The real estate developer, who did not honor the payment of coupons linked to a bond for an amount of 255 million dollars due last Thursday, remains in a delicate situation. However, he has a grace period of 30 days to honor this payment.
Investors want to be reasonably optimistic that while the Omicron variant is significantly more contagious than previous strains, it is also known to be less dangerous, according to hospitalization data. The risks to the economy linked to the pandemic are expected to decrease, especially as China is on the way to easing its monetary policy.
Generally, ” our economists anticipate less disruption to economic activity and aim for above-trend global growth in the first quarter, particularly in Asia. Regarding the Fed’s monetary tightening, the peak of disruption for the markets is also close “, Summarize the strategists of JPMorgan based in Hong Kong in a note quoted by Bloomberg.
Oil, cars and banks in sight
Investors will keep an eye on the development of inflation and the response of central banks. Many strategists, including those at Citi, predict increased volatility in the face of these unknowns. The week which begins will be marked in particular by the first estimate of December inflation in the euro zone, as well as by the employment report for the same month in the United States.
Main support for the Cac 40, TotalEnergies gained 2.1% in the wake of the 1.6% increase in the barrel of Brent from the North Sea. Libya has reduced production due to ongoing repairs to facilities damaged by attacks on several fields in the country. Opec + is due to meet on Tuesday to discuss an increase in production in February. The market estimates that the expanded cartel should stick to an increase of 400,000 barrels per day next month.
Saffron gains 2.6%. Its managing director, Olivier Andriès, estimates in an interview with Figaro that the worst is over for the aeronautics sector and says he is “very confident”. Airbus advance for its part of 2.9%.
Air France-KLM 5.1% advance and ADP 3.8% while Citi raised its recommendation on the two securities to “sell” to “neutral”.
Banks rise in the wake of rising bond yields. That of the German 10-year bond, which serves as a benchmark in the euro zone, is stretched by nearly 2 basis points to -0.1790%. BNP Paribas increases by 0.8%, Agricultural credit 1.6% and Societe Generale by 1.3%.
Great (+ 0.7%), Michelin (+ 2.7%), Schneider Electric (+ 1.2%) and Pernod Ricard (+ 0.1%) started the year with new records.