The Paris Stock Exchange ended down 0.41% on Wednesday, fearing that the global economy could enter a significant recession in 2023 because of soaring interest rates, which may not drop anytime soon.
The main index of the CAC 40 stock market fell by 27.20 points to 6,660.59 points. The rating has been falling since the beginning of the week, changing its trend after nine consecutive weeks of increases.
“The trend is cautious for the fourth session in a row, due to fears about the rapid rise in interest rates, the deterioration of the economy and a looming recession”, comments Ilana Azuelos-Bossard, director assistant at Kiplink Finance.
The action of the central banks to bring inflation back to an acceptable level is indeed starting to have an impact on economic activity, which is showing more and more signs of slowing down.
The CEO of JPMorgan Chase bank, Jamie Dimon, has also warned, on the American channel CNBC, that inflation and the measures of the Fed to curb it “could well derail the economy and cause a moderate recession. or severe”.
The chief executive of another bank, Goldman Sachs, David Solomon, went in the same direction, and said to expect “a turbulent period” on the economic level.
This small phase of decline is nevertheless considered “normal” by the Kiplink Finance expert who recalls that “the CAC 40 has gained 1,000 points in six weeks”, resisting “rather well given all the anxiety-provoking elements” which appear in the rank investor concerns for several months.
“The market does not take into account good news, which we have been waiting for a while nevertheless: the easing of health restrictions in China”, adds Ms. Azuelos-Brossard.
Sanofi leads the CAC 40 after a legal victory
The pharmaceutical group Sanofi climbed 6.10% to 90.60 euros, driven by a legal victory in the United States in the case of Zantac, a treatment long sold in North America against heartburn but withdrawn from the market in 2019 after studies established that this drug degrades in the body into a carcinogenic component.
“This decision significantly reduces the scope of the litigation, potentially by more than 50%, and supports Sanofi’s scientific defenses against the allegations made”, reacted the laboratory.
The dispute concerns several American states.
Conversely, its subsidiary specializing in active ingredients Euroapi fell 15.75% to 14.37 euros, after having slightly revised down its financial outlook after the suspension of certain production activities in Budapest. Euroapi now forecasts a turnover of 980 million euros, against 1 billion previously, and a gross operating margin of its main activities of 12% to 13%, against 14% previously forecast.
Degraded Kering
The action of the luxury group Kering fell 4.15% to 522.60 euros, the largest drop in the CAC 40, due to a note from the bank UBS which is worried about the future performance of the company, after the departure of the creative director of Gucci and the controversy over the Balenciaga brand. UBS analysts have changed their recommendation on this title to “neutral”, against “buy” previously.
Airbus drops
Airbus (-2.20% to 108.40 euros) will “just miss” its target of 700 aircraft delivered in 2022, the European aircraft manufacturer said in a press release on Tuesday. However, the group maintained its financial targets for 2022.
OL fall again
The action of OL Groupe, the company that owns the Olympique Lyonnais football club, fell 11.02% to 2.18 euros after losing 12% on Tuesday, the first trading session for the title after nearly one month suspension. On Monday, OL Groupe gave an “ultimate deadline” of two days to finalize the operation to buy the club by the American John Textor announced since the summer.
jvi/fs/eb