The control room of Euronext, the company that manages the Paris Stock Exchange (AFP/Archives/ERIC PIERMONT)
The Paris Stock Exchange confirmed its rebound on Tuesday, helped by the lull in the banking sector pending Wednesday’s monetary policy decision from the US Federal Reserve.
The star CAC 40 index recovered by 1.42% to 7,112.91 points the day after a rebound of 1.27%, without yet offsetting the 4% losses of the past week.
“Investors have so far been reassured about the strength of banks’ equity and this is the nature of the rebound” initiated since the day before, commented for AFP, Frédéric Rozier, portfolio manager of Mirabaud France.
They were able to count on the “strong reaction” of the central banks and regulators concerned in the United States and Europe to reduce the mistrust of the banking sector generated by the bankruptcy of several American regional banks, followed by the liquidity crisis of Credit Switzerland, bought by UBS last weekend to eliminate the risk of contagion to other establishments.
Consequently, there is for the time being “again appetite for risk, motivated by cheap purchases” particularly on banking stocks very shaken last week by these fears concerning financial stability, completes Mr. Rosier.
In this context, the American central bank, meeting until Wednesday, will have to navigate between persistent inflation which could push it to raise its rates and the risk that such an action could fuel the banking crisis.
Investors remain torn between the likelihood of a quarter-point hike in key rates and a monetary status quo.
Banks catching up
Banks were among the best progressers in the CAC 40 index: Societe Generale recovered by 4.30% to 21.93 euros, BNP Paribas by 4.15% to 54.74 euros, Crédit Agricole 2.25% at 10.28 euros. The insurer Axa also gained 4.15% to 27.72 euros.
TotalEnergies strengthens its ambitions to fight against global warming
TotalEnergies (+2.51% to 55.21 euros) announced on Tuesday the strengthening of its short-term objectives for reducing greenhouse gas emissions linked to petroleum products, while their share is decreasing in its activities in favor of the gas and renewable energies.
© 2023 AFP
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