The control room of Euronext, the company that manages the Paris Stock Exchange (AFP / Eric PIERMONT)
The Paris Stock Exchange ended up 0.33% on Thursday, after a turbulent second part of the session and marked by the decision of the European Central Bank (ECB) to raise its rates sharply.
The flagship CAC 40 index rose 19.98 points to 6,125.90 points, for its third consecutive session up slightly. Over the first four sessions of the week, it fell again by 0.67%.
The Parisian rating spent the first part of the session stable, before falling quite sharply, beyond -1%, during the speech of the President of the ECB, Christine Lagarde. But the rating rose again more than ever.
Caught up by record and persistent inflation in the euro zone, at 9.1% over one year in August, the Frankfurt institution accelerated the tightening of its monetary policy on Thursday by deciding to raise its interest rates by unprecedented scale since its creation in 1999: 75 basis points.
Serving as a reference in a context of abundant liquidity, the rate on bank deposits at the ECB, reduced from -0.5% to 0% in July, thus rose to 0.75%.
But this decision is not a surprise and “had been telegraphed well in advance”, reacted Gilles Guibout, manager of Axa IM, to explain the moderate reaction of the market.
Investors were most struck, he said, by Ms. Lagarde’s warnings about the persistence of inflation: “We are still a long way from the rate that will help bring inflation down to 2%.” And “we will continue” the increases, she added.
The effect was more visible on the debt market: the interest rate on the French 10-year loan rose to 2.22%, against 2.14% on Wednesday. It is once again approaching its peak for the year, 2.38% in mid-June.
“More generally, stock market indices are under pressure from rising rates and the risk of downward revisions to corporate results. We expect a decline for the end of the year”, which has already been taken into account by the market, “but will the decline be in line with expectations?” Asks Mr. Guibout.
Financials benefit from rising interest rates
The decided and future rate hikes allowed financial companies, especially banks, to take advantage of the trend. Societe Generale took 2.62% to 23.07 euros, BNP Paribas 1.99% to 47.44 euros and Crédit Agricole 1.36% to 9.21 euros. The insurer Axa also took 2.78% to 24.38 euros.
© 2022 AFP
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