The control room of Euronext, the company that manages the Paris Stock Exchange (AFP/Archives/ERIC PIERMONT)
The Paris Stock Exchange stabilized on Thursday, some market participants considering that the feverishness of the banking sector could soon encourage central banks to loosen the monetary screw a little.
After a lower opening, the flagship CAC 40 index ended close to balance (+0.11%) at 7,139.25 points, thus signing four sessions in the green since the start of the week and carrying its weekly performance more than 3%.
The US Federal Reserve (Fed) raised its key rate by only a quarter of a percentage point on Wednesday in a context undermined by the banking crisis.
And going forward, the majority of the 18 Fed officials anticipate an additional quarter-point rate hike.
However, many market participants are arguing that the turmoil in the banking sector will de facto tighten financial conditions, which should reduce the need for central banks to go further with rate hikes intended to combat the inflation.
“The projections of members of the Fed on the level of rates have not evolved upwards since the last projections of December”, notes Alexandre Baradez, analyst at IG France, which gives, according to him “an indication that the Fed won’t go much higher” in its ongoing monetary tightening (rate hike).
“Because of banking stress, central banks will be much less obliged to go further on rates,” he adds, referring to remarks made by the President of the Fed echoing those of the President of the European Central Bank (ECB), according to which the current tensions could mechanically accentuate the increase in the cost of credit.
In terms of values, Sanofi shares rose 5.48% to 95.84 euros, finishing at the top of the CAC 40.
The pharmaceutical giant announced several news this week that could further expand the market for Dupixent, its flagship drug, including favorable results against a common lung disease.
The Teleperformance title slipped 2.59% to 214.80 euros.
The French call center giant announced on Wednesday that it would return to the moderation of shocking content on the internet. The decision to stop this activity fell in November, at the end of a scandal triggered by an investigation by journalists among its employees in Colombia, “traumatized” by viewing many trying videos.
© 2023 AFP
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