The Paris Stock Exchange ends the month down sharply


The control room of Euronext, the company that manages the Paris Stock Exchange (AFP/Archives/ERIC PIERMONT)

The Paris Stock Exchange marked a sharp decline of 1.54% on Wednesday, weighed down by poor economic indicators in China, a large market in particular for luxury which represents 30% of the CAC 40 index.

The flagship index lost 111.05 points to close at 7,098.70 points. The day before, it had fallen by 94.06 points, ending at 7,209.75 points.

In May, the Paris Stock Exchange lost 5.24%.

This month, it not only signs its first monthly balance sheet in decline since the beginning of the year, but also the worst since September 2022, at a time when investors feared that rate hikes by central banks would push the economy. in recession.

The tensions are currently multiple for the markets. “The economic recovery in China is not as strong as hoped and there are fears about the US debt agreement,” summarized Arnaud Morvillez, manager at Uzès Gestion.

Manufacturing activity in China fell in May for the second consecutive month, data showed on Wednesday, while analysts had expected an increase. The activity indicator in services also fell in May in the country, confirming an economic recovery much more laborious than expected.

“Obviously fears about the extent of the rebound in the Chinese economy are having an impact on the luxury sector in particular and we saw an underperforming CAC 40 today (Wednesday), but we should however note profit taking on these values”, underlined the analyst.

As on other global stock market indices, luxury groups were struggling in Paris: LVMH lost 2.64% to 813.90 euros, Kering 2.91% to 498.35 euros and Hermès 2.64% to 1,901 .80 euros. As for cosmetics, L’Oréal dropped 1.29% to 399 euros.

As for “fears about the default of the American debt, which would be the dark scenario”, Arnaud Morvillez believes that until the situation is clearer, “the market will not progress”.

A draft agreement was sealed on Saturday between the White House and Speaker of the House of Representatives Kevin McCarthy to raise the US debt ceiling. After approval in committee on Tuesday evening, the text is now awaiting the green light on Wednesday evening from the House, whose vote is scheduled for around 00:30 GMT.

The Senate, narrowly dominated by the Democrats, will then have to adopt the text before Monday, the date on which, according to Treasury Secretary Janet Yellen, the United States could run out of cash if the possibility of borrowing is not restored.

On the bond market, interest rates in France eased, the rate for the 10-year loan stood at 2.84% against 2.90% at the close.

Capgemini takes off

In a bear market, the French computer group Capgemini climbed 6.82% in Paris, to 162.80 euros, after announcing to extend its partnership in the field of artificial intelligence (AI) and data analysis. with Google Cloud. AI is seen by many investors as an extremely buoyant market.

© 2023 AFP

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