The control room of Euronext, the company that manages the Paris Stock Exchange (AFP / Eric PIERMONT)
The Paris Stock Exchange rebounded cautiously on Wednesday morning, welcoming the holding of an exceptional meeting of the European Central Bank (ECB) which restored tone to banking stocks before a monetary decision by the American central bank (Fed).
At 11:15 a.m., the CAC 40 index regained 0.81% to 5,998.08 points after six sessions of decline.
“Some investors are bargain-hunting after the recent drop in the indices. They might think that the Fed’s dreaded acceleration in monetary normalization tonight, a 75 basis point rate hike, is now priced in. “, observes Franklin Pichard, director of Kiplink Finance.
The Fed’s monetary committee is due to unveil the extent of its additional monetary tightening to tame inflation on Wednesday at 6:00 p.m. GMT, a decision that will be followed by a much-anticipated press conference by Fed chief Jerome Powell.
The option of a 50 basis point hike has not completely disappeared from the radar, but the 75 basis point hike has swelled in recent days after the publication of an acceleration in US consumer prices in may.
Another market catalyst, the European Central Bank announced an exceptional meeting on Wednesday morning, a week after announcing a tightening of its monetary policy to fight inflation which was accompanied by a widening gap in borrowing costs between the euro zone states.
The imminence of this surprise meeting relaxed the sovereign debt market in the euro zone, which supported the equity market. The ten-year Italian bond rate fell more than 20 basis points to 3.95% after having exceeded 4% since the start of the week.
“The ECB seems to be stealing the show a bit from the Fed today, but the US central bank remains the major market event,” said Neil Wilson, analyst at markets.com.
According to him, the ECB should “just tell the markets that it is working on a new tool/plan” in the face of the risk of financial fragmentation in the euro zone.
Rates on the public debts of countries considered fragile have recently risen much more than German rates and this gap has accelerated after the ECB announced last week its intention to begin a cycle of rate hikes in July. its key rates to fight inflation.
ECB officials have repeatedly hammered home in recent weeks that they are ready to act urgently if the risk of fragmentation in the sovereign debt market increases, but many observers have bemoaned the absence concrete solution presented by the institution.
On the securities side, financials regained momentum after having suffered a lot at the start of the week: Axa rose by 2.93% to 23.06 euros, Crédit Agricole by 2.62%, BNP Paribas by 2.24% and Société Générale by 2.07% around 11:13 a.m.
EDF took 1.86% to 8.31 euros. A renationalization of EDF to allow it to build new nuclear reactors has not yet been decided, but it “is not excluded”, said Minister of Energy Transition Agnès Pannier-Runacher on Tuesday.
© 2022 AFP
Did you like this article ? Share it with your friends with the buttons below.
