The Paris Stock Exchange ended up 0.60% Thursday, taking advantage of US indicators to confirm its rebound despite a change in monetary direction confirmed by the US Federal Reserve on Wednesday.
The star CAC 40 index gained 41.84 points to 7,023.80 points after starting the day well anchored in negative territory. On Wednesday, the index rebounded strongly by 2.11%, after falling nearly 4% on Monday.
The president of the American central bank, Jerome Powell made it clear that the Fed will act and in a rather short period of time, so the market reacted badly in the short term, in particular on the futures contracts which fell sharply before the opening of the markets. European markets, explains Alexandre Baradez, analyst for IG France.
Faced with inflation that reached 7% in the United States, Jerome Powell confirmed that the institution was planning to raise key rates in March, without specifying the extent of the increase envisaged.
In addition, the Fed is ready to reduce its balance sheet, inflated by two years of asset purchases, sooner and perhaps faster than it did in its last attempt, in 2017, according to its chairman.
At midday, however, the Parisian coast returned to the green, regaining some optimism after the publication of 5.7% growth in American gross domestic product (GDP) in 2021, the strongest since 1984. In the fourth quarter, it was well above expectations.
A 7.9% jump in 2021 in household consumption spending, which accounts for nearly three-quarters of the US economy, also conquered the markets, which however remain unstable according to Mr. Baradez.
The dollar, which appreciated against the euro, due to the Fed’s more aggressive rhetoric, also helped support the CAC 40 today, he added.
Oil prices remain tight after having exceeded the threshold of 90 dollars a barrel for Brent on Wednesday, in a context of strong geopolitical tensions, particularly in Ukraine.
According to Alexandre Baradez, the market looks at oil prices through the prism of inflation and the action of central banks to counter it and therefore takes the current trend as bad news.
STMicroelectronics resists
While technology sector stocks suffered from the Fed’s change in tone (Dassault Systmes -2.74% to 41.06 euros, Worldline -2.48% to 42 euros), semiconductor manufacturer STMicroelectronics benefited from its better than ‘expected and took 2.02% 40.57euros.
In the same sector, Soitec gained 0.75% to 160.90 euros after its results and signs of easing in the governance crisis affecting the group.
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