The control room of Euronext, the company that manages the Paris Stock Exchange (AFP/Archives/ERIC PIERMONT)
The Paris Stock Exchange ended down 1.07% on Wednesday, a succession of interventions by central bankers much less optimistic than the market on monetary policy in 2024 causing prices to fall.
The flagship CAC 40 index fell 79.31 points to finish at 7,318.69 points. On Tuesday, it lost 0.18%. It is now at its lowest since November 30.
Both on the side of the American Central Bank (Fed) and its European counterpart (ECB), “there is the desire to calm the enthusiasm of the markets”, which are planning towards cuts in the key rates of these institutions from March, explains Andréa Tuéni, analyst at Saxo Banque.
After an influential Fed official on Tuesday, it was ECB President Christine Lagarde who took to the front on Wednesday at the Davos Forum. According to her, the ECB could start reducing its interest rates only this summer or by summer.
“There is still a level of uncertainty and certain indicators that are not anchored at the level where we would like to see them,” she said.
These declarations have lowered the probability estimated by market players of a reduction in key rates from March, even if the idea still remains in the majority
On the bond market, the French State loan with a ten-year maturity, which is the benchmark, stood at 2.81% compared to 2.75% on Tuesday.
These movements then “had an impact” on stock prices, describes Mr. Tuéni.
The decline was also reinforced by “the trend in China”, where the indices fell after the publication of disappointing Chinese growth, observes the analyst.
In 2023, China experienced the weakest growth in three decades outside the Covid period, at a time when a real estate crisis and uncertainties are weakening the recovery for the second world power.
Luxury is still losing its shine
Luxury companies have been penalized by China and the prospect of higher interest rates for longer. LVMH lost 2.84% to 647.40 euros, Kering 3.51% to 346.10 euros and Hermès 0.84% to 1,810 euros.
Kering and LVMH are two of the three worst performers in the CAC 40 in the first sessions of 2024, down more than 10%.
Changes in interest rate considerations also hampered the technology sector, with Teleperformance down 2.65% to 128.50 euros and Stmicroelectronics down 2.36% to 38.88 euros.
The real estate company Unibail-Rodamco-Westfield also lost 1.79% to 65.66 euros.
Force majeure for TotalEnergies
TotalEnergies (-2.22% to 58.76 euros) announced Tuesday evening that it had activated the case of “force majeure” for the gigantic Arctic LNG 2 project in the Russian Arctic, from which it had withdrawn at the start of 2022 and which is now targeted by American sanctions.
This legal clause allows companies to suspend deliveries due to factors deemed beyond their control. The company may also have been penalized by the decline in oil prices during the session.
OVH Cloud has a successful investor day
The French cloud flagship OVH Cloud gained 5.40% to 9.95 euros at the end of its investor day, where it described its financial objectives until 2026. It hopes to be able to generate cash flow over the year 2026 and aims for annual organic growth (on a comparable basis) of between 11 and 13% between 2024 and 2026.
© 2024 AFP
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