The control room of Euronext, a company that manages the Paris Stock Exchange (AFP / Archives / ERIC PIERMONT)
The Paris Bourse ended sharply down 1.44% on Monday, in the red for the third consecutive session since a publication showing the willingness of the US Federal Reserve (Fed) to tighten its monetary policy.
The flagship CAC 40 index lost 103.71 points to 7,115.77 points. On Friday, it had fallen 0.42%.
Since its closing peak reached last Wednesday, the Parisian rating has lost 3.5%. On Monday, it attempted a rebound which quickly ran out of steam, before widening its losses after the opening of US markets.
In the absence of new macroeconomic data, “it is again the theme of the rise in rates” which has imposed itself in the minds of investors, observes Yohan Salleron, equity manager of Mandarine Gestion.
This new environment, after years of low interest rates, materialized a little more with the publication on Wednesday of the minutes of the monetary policy meeting of the American Central Bank (Fed). It has shown itself to be more resolute in its fight against inflation, which reached a record level in 40 years in November in the United States.
The Fed plans to make four key rate hikes – today at a historically low level – instead of the three previously anticipated. Above all, the institution could start selling some of the assets it has bought for 18 months to support prices in the face of the health crisis.
This signal pushed rates on the bond market, which had already been trending upward since the end of December: the yield on the ten-year American sovereign loan returned to a pre-Covid level, at 1.80%. In France, the trend is similar. The ten-year OAT is now at 0.28%, close to its post-crisis highs.
This new environment does not have the same effects on societies depending on the sector. So-called growth companies, such as those in the technology or luxury sectors, suffer more.
Tech and luxury falter
As for technology stocks, Worldline lost 5.36% to 48.71 euros, Teleperformance 4.14% to 363.70 euros and STMicroelectronics 4.39% to 42.43 euros.
The IT group Atos tumbled 16.82% to 32.10 euros, sanctioned for presenting preliminary financial figures for 2021 below its targets.
Luxury also suffered, like Hermès who lost 5.08% to 1,374.00 euros. Second best performance in 2021, the stock is the third worst since the start of 2022, with more than 10% losses.
Big contract for Thales
Thales share took 1.63% to 78.78 euros after a contract with the French Air Force worth 1.5 billion euros over ten years, according to corroborating sources.
Banks resist
The banks, favored by a hike in rates, and industrial stocks such as automobiles, have once again held up better.
Crédit Agricole gained 0.54% to 13.53 euros, while Societe Generale fell only 0.56% to 33.02 euros. Both banks are in the top five stocks at the start of the year.
© 2022 AFP
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