The Paris Stock Exchange closed up 0.74%, driven by welcome signals of economic slowdown in the wake of upcoming monetary policy decisions by central banks, which could lower their rates in 2024, if disinflation continues.
The flagship CAC 40 index advanced 54.40 points, 7,386.99 points. On Monday, the Parisian rating fell slightly by 0.18%, catching its breath after the strong cumulative gains in November.
The rise in equity markets appears to be based on the idea that the US, European and Canadian central banks will begin cutting interest rates in March, then three times over the rest of 2024, comments Craig Erlam, an analyst at ‘Oanda.
Sophie Chauvellier, manager of Dorval AM, underlines that the discourse of the European Central Bank (ECB) has evolved more than that of the American Federal Reserve (Fed) on its monetary policy.
In November, the governor of the Bank of France, Franois Villeroy de Galhau, declared that the ECB’s interest rates would no longer increase unless there was a shock and surprise.
Furthermore, in a Reuters interview, Isabel Schnabel, a member of the board of the European Central Bank (ECB), pointed out that inflation had slowed more than expected in November, making a further rate hike rather unlikely.
In terms of indicators published at the meeting, in the United States, vacant jobs fell significantly, 8.7 million in October compared to 9.4 million in September (revised figure), the lowest in more than two years, showing that monetary policy of the Fed is cooling the job market.
Still in the United States, in the services sector, activity continued to grow in November at 52.7%, better than expected, and a stronger pace than the previous month (51.8%), according to the ISM index.
These data are in line with the market narrative, namely disinflation without a collapse in activity, notes Sophie Chauvellier.
L’Oral acquires Danish Lactobio
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The French cosmetics giant announced on Monday that it had finalized the acquisition of the Danish company Lactobio, which will allow it to develop new cosmetics from living bacteria. L’Oral closed up 0.65% at 439.75 euros.
Vallourec focuses on vertical storage of hydrogen
The group specializing in seamless pipes for the oil and gas industry has unveiled a prototype, which it presents as unique in the world, for vertical storage of gaseous hydrogen, on which it is counting to establish itself on the market industrial decarbonization. The announcement was not enough to carry the title of Vallourec, which ended down 0.36% to 13.76 euros.
The Compagnie des Alpes harmed by energy
The profitability of the operator of ski areas and owner of leisure parks suffered during the 2022/2023 financial year from the doubling of energy costs despite a turnover which exceeds one billion euros. Sanctioned, the action fell by 1.28% to 13.92 euros.