The control room of Euronext, the company that manages the Paris Stock Exchange (AFP/Archives/ERIC PIERMONT)
The Paris Stock Exchange ended slightly down 0.09% on Wednesday, marking a decline after a surprise hike in the main key rate of the central bank of Canada, ahead of the meeting of the American Federal Reserve (Fed).
The star CAC 40 index dropped 6.21 points to finish at 7,202.79 points. The day before, the Parisian place had grabbed 0.11% to 7,209.00 points.
“We have markets that have performed very well since the beginning of the year and it is logical that they are a little bit down today while waiting for the outlook for monetary policies in the coming months”, explains Vincent Juvyns, member of JPMorgan AM’s strategy team.
The American Federal Reserve is holding a meeting on June 13 and 14 to decide on its monetary policy and a possible increase in its key rates in June. European Central Bank officials will meet again on June 15.
But today, the markets were surprised by the increase in the Bank of Canada’s main key rate, by 0.25 points, which reached a high since May 2001 at 4.75%, while this bank was three months ago the first major central bank to pause its hikes.
The monetary institution had “many reasons to relaunch its tightening cycle today” but “we thought the Bank of Canada would wait until July” to do so, acknowledged Josh Nye, analyst for the Royal Bank of Canada. , in a footnote.
A further increase announced on July 12 is “probable”, given that it is “difficult to predict a slowdown”, added this expert.
With the approach of the Fed meeting, many analysts believe that the American monetary institution will pause in June after ten consecutive rate hikes.
On the bond market, the interest of the French 10-year loan was at 3.00% against 2.91% at the close the day before.
In addition to the central banks, the markets are keeping an eye on China, but the economic recovery of the second world power “is happening more gradually than expected”, underlines the analyst.
In detail, exports from China, a historically key growth lever for the country, plunged in May, for the first time since February.
Stellantis continues on its way
Automaker Stellantis gained 1.45% to 14.95 euros after announcing on Wednesday the launch of the second tranche, worth 500 million euros, of its share buyback program totaling 1.5 billion euros, announced on February 22. The group had already completed a first installment of the same amount.
The transaction will close “no later than September 7” and the repurchased shares will be cancelled, according to a statement.
© 2023 AFP
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