The control room of Euronext, the company that manages the Paris Stock Exchange (AFP/Archives/ERIC PIERMONT)
The Paris Stock Exchange lost 0.46% on Tuesday, as investors did not appreciate comments by the President of the American central bank (Fed) Jerome Powell warning that the institution could again accelerate the pace of rate hikes and the push higher than expected.
The star CAC 40 index fell 33.94 points to 7,339.27 points. On Monday, he had gained 0.34%, narrowly failing to set a closing record after exceeding the 7,400 point mark for the first time at the start of the session.
“The most recent economic data is stronger than expected, suggesting that the final level of policy rates is likely to be higher than expected,” said Jerome Powell.
In other words, the economy remains overheated and the Fed’s main key rate could continue to climb beyond 5.1%, the level at which the institution’s officials saw it stopping, according to their latest forecasts, which were published in December.
The Fed Chairman also warned that rates could stay high “for a while.”
For Alexandre Baradez, analyst of IG France, Jerome Powell “reminds us that we must not let go of the reins too quickly”.
“The reaction of the markets is logical given the content of the remarks”, according to Alexandre Baradez, who does not note “no panic of the market, which expected this kind of declarations”.
The main movement of the day on the stock side concerns biotechnology companies: Gensight fell more than 21.75% to 2.42 euros, after the announcement of a new production delay in a treatment for a rare genetic disease of the retina.
Conversely, Genomic Vision soared 68.77% after announcing that it was relying on software based on artificial intelligence to automate certain analyses. However, the share is only worth four cents, whereas it was worth 15 euros in 2015.
The world number one in luxury LVMH, which announced the reorganization of its beauty division, lost 1.08% to 816.10 euros.
The more tepid than expected economic recovery in China and the prospect of further interest rate hikes which could affect global economic growth weighed on mining stocks, such as ArcelorMittal which fell 1.84% to 29.42 euros and Eramet by 4.45% to 103 euros.
© 2023 AFP
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