The Paris Stock Exchange rebounded 0.79% on Tuesday as investors showed little inclination to take excessive risks ahead of Wednesday’s planned announcements from the US Central Bank on its next inflation-fighting measures.
The star CAC 40 index took 50.57 points to 6,476.18 points. The day before, it had fallen by 1.66% due to fears about global growth.
The Parisian coast was rather indecisive during a session which was an opportunity to catch its breath, after the fall of the American indices on Friday and before the announcements of the Federal Reserve (Fed) on Wednesday evening, notes Gilles Guibout, responsible European equities at Axa IM.
While the United States faces inflation at its highest in 40 years, most investors are planning to raise key interest rates by half a percentage point to set them between 0.75% and 1%. It would be the first time in more than 20 years that the Fed would operate a tightening of this magnitude.
The monetary tightening of the Federal Reserve, whose meeting began on Tuesday, will not cause a major correction in the equity markets, according to Gilles Guibout.
The rise in interest rates is in fact weighing on the valuation of shares, which no longer necessarily rise despite the publications of corporate results which have been good overall, he explains.
Regarding the health of companies, investors are now wondering if there will be declines in the volume of activity, given that consumer demand is falling due to price increases and if pressure on margins will appear, anticipates Gilles Guibout.
Economic growth is showing signs of flagging around the world due in particular to the war in Ukraine and the disruption caused by the confinements in China.
BNP supports banks
After a record year in 2021, the largest French bank made net profit of 2.1 billion euros in the first quarter, up 19.2% year-on-year, driven by an outperformance of its corporate banking and investment.
The group massively beat expectations, with net income 53% above consensus, Jefferies analysts said in a note.
The title rose by 5.15% to 51.32 euros, the second largest increase in the CAC 40. Socit Gnrale (+3.15% to 23.41 euros) and Crédit Agricole (+2.62% to 10.48 euros), of this lan.
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New projects for Stellantis and Faurecia
With the acquisition announced Tuesday of the German car-sharing company Share Now, a joint venture between Mercedez-Benz and BMW, Stellantis and its subsidiary Free2Move are establishing themselves in 14 new cities in Europe and confirming their ambition to become one of the in new mobility.
The manufacturer gained 2.92% to 12.98 euros, while Renault rose 3.83% to 24.15 euros.
Still in the automotive sector, the equipment supplier Faurecia (+2.09% to 21.04 euros) and the water and waste giant Veolia (+1.37% to 27.46 euros) announced a cooperation to develop the use recycled plastic inside cars.
Acquisition at Thales
The French defense and technology group Thales (+3.35% to 124.85 euros) announced the acquisition of a Swiss company specializing in the virtual training of armed forces on the ground, thus strengthening its training center for the military.