The control room of Euronext, the company that manages the Paris Stock Exchange (AFP / ERIC PIERMONT)
The flagship index of the Paris Stock Exchange, the CAC 40, ended up 0.77% on Thursday and at a historic high, above 8,000 points, supported by announcements from the European Central Bank (ECB) , with the market hoping for a first rate cut in June.
The CAC 40 thus advanced by 61.48 points, ending the stock market session at 8,016.22 points, a closing record after also hitting a record during the session at 8,029.37 points. On Wednesday, it gained 0.28%.
For four and a half months, the Parisian index has experienced a meteoric jump, of almost 18% compared to its low point during the session of October 23. This movement took place in two stages: a first phase at the end of 2023, with the decline in interest rates on the debt market, and a second phase between the end of January and mid-February with the results of businesses.
For 10 days, the Parisian market remained stuck just below 8,000 points. It was ultimately the ECB meeting on Thursday which allowed it to cross this threshold for the first time in its history, driven by the hope of a more flexible monetary policy thanks to progress on the inflation front.
“The ECB has revised downwards both its growth and inflation forecasts, which constitutes a big step towards a rate cut in June,” commented Alexandre Baradez, analyst at IG France.
However, “the ECB is waiting to have more data on the trajectory of annual wage growth in the euro zone, this is today almost the only component that worries it,” explains the analyst.
For good reason, “if purchasing power improves, this could push companies to maintain their capacity to raise prices and this risks slowing down a return to inflation at 2%”, which is the target objective pursued by the ECB, he adds.
The American central bank (Fed), which will meet on March 19 and 20, is expected to adopt the same cautious attitude, after its president Jerome Powell declared on Wednesday that developments on the inflation front “are not assured “.
But whatever its big American sister does, the ECB will act “independently”, its president Christine Lagarde insisted on Thursday.
For the markets to maintain their optimism, “the employment data in the United States on Friday would have to send signals of slowdown”, concludes Alexandre Baradez.
On the bond market, interest rates on sovereign debt fell slightly in Europe and remained stable in the United States.
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Euronext CAC40