The Paris Bourse closed slightly up 0.36% on Thursday, cautious about the lack of progress in negotiations between Ukraine and Russia, which raises fears that the war, and its economic consequences, will not don’t stop anytime soon.
The star CAC 40 index rose by 23.88 points to 6,612.52 points. The day before, it had jumped 3.68%, hoping for an early compromise between Russian and Ukrainian negotiators.
The market had been betting on a de-escalation for a week and we can see today that the conflict will last over time, notes Charles de Riedmatten, equity manager of Myria AM.
The Kremlin spokesman said Thursday that the Russian delegation was making great efforts and accused the Ukrainians of not showing the same zeal. A statement that comes after Joe Biden accused Vladimir Putin of being a war criminal.
The situation caused crude oil prices to rise by more than 7%.
The market has trouble assessing what the impact on the economy will be, but the risks of stagflation are growing, says Charles de Riedmatten.
These fears of slowing economic growth and high inflation are reflected in particular in the bond market where interest rates on short-term US debt are approaching that of the 10-year maturity.
The acceleration of the rise in prices in the United States pushed the American Federal Reserve, the Fed, to raise its key rates by 0.25 points on Wednesday, a first since 2018, to bring them into the range between 0.25 and 0 .50%.
The Fed is now expecting 4.3% inflation in 2022, almost double its last forecast in December.
The war could cost one point from global growth in a year if its effects on energy and financial markets prove to be long-lasting, the OECD has warned, and could push inflation up by around 2.5 points more.
Renault running out of parts
The car manufacturer Renault is going to shut down two factories, for lack of electronic chips but also parts from Ukraine. Its title lost 5.49% 23.41 euros, the worst performance of the CAC 40 due to its exposure to Russia.
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The entire automotive sector is penalized by the Russian-Ukrainian conflict, which raises fears of disruptions in their production chains.
Stellantis sold 2.31% for 14.71 euros. The equipment manufacturers Faurecia (-5.68% 24.73 euros), Valeo (-1.34% 15.82 euros) and Plastic Omnium (-2.25% 16.50 euros) also suffered.
Bug at Alstom
A computer bug affecting a railway signaling system supplied by Alstom has affected the circulation of trains in Poland, Italy and Asia, but the problem is known and is in the process of being resolved. The action of the railway manufacturer lost 2.83% to 20.98 euros, also penalized because of its exposure to Russia.
Veolia record before even absorbing Suez
Veolia achieved record results in 2021, even before the spectacular absorption of its rival Suez. The group is aiming for solid growth for 2022, despite the uncertainties linked to the war in Ukraine. It rose by 2.77% to 30.02 euros.