The control room of Euronext, the company that manages the Paris Stock Exchange (AFP / ERIC PIERMONT)
The Paris Stock Exchange concluded a second consecutive session with a sharp decline on Tuesday (-1.33%), after the dissolution of the National Assembly in France, and awaits developments in the monetary policy of the American central bank.
The flagship index of the Paris Stock Exchange fell 104.77 points to 7,789.21 points, the lowest since the end of February. On Monday, the index had already lost 1.35%, ending at 7,893.98 points.
“The session echoes this weekend’s European elections and in particular the dissolution of the National Assembly in France,” comments Adrien Roure, portfolio manager at Indosuez.
For David Zahn, head of European bond management at Franklin Templeton, a parliamentary majority of the National Rally “would complicate national” and European political prospects and the markets were “not prepared” for a political risk linked to elections in France.
Investors’ concerns were expressed on the bond market, where the interest rate on ten-year French government bonds reached 3.32% at the session’s highest. Around 4:00 p.m. GMT, it stood at 3.26% and its German equivalent was at 2.62%.
The gap between the French rate and the German equivalent, an indicator that measures investor confidence in the country, has increased to a record level since 2020.
However, “even if today we have a specific risk on French politics, the market remains very focused in the short term on American inflation and central bank policy”, estimates Adrien Roure.
As for the American central bank (Fed), it is meeting from Tuesday and will hold a press conference on Wednesday evening to present the developments in its monetary policy.
The Fed’s monetary policy committee, the FOMC, announced in December three cuts in the monetary institution’s key rates during the year, but the persistence of inflation pushed it to hold back a first cut of rate during the first half of 2024.
TF1 and M6 caught up in politics
The titles of TF1 (-6.95%) and M6 (-3.12%) lost weight after the National Rally reiterated the day before that it was still considering privatizing French public broadcasting, with a possible impact for private actors due to competition.
“This would naturally be very negative for private actors” who could observe a “clear decline in their income and therefore their margins”, explain Oddo BHF analysts in a note, at a time when the National Rally is leading the polls. for early legislative elections.
Atos drops Kretinsky
The board of directors of the heavily indebted IT group Atos announced on Tuesday that it would choose the takeover offer from the consortium led by the French company Onepoint, its main shareholder, to the detriment of that of Czech businessman Daniel Kretinsky. , considering it “better oriented in terms of the social interest of society”.
Atos shares, considered a target for speculative investors by many analysts, fell 15.11% to 0.97 euros.
Euronext CAC40