The Paris Stock Exchange ends up sharply, driven by banks

The control room of Euronext, the company that manages the Paris stock exchange, at La Défense, November 21, 2019 (AFP / ERIC PIERMONT)

The Paris Stock Exchange ended up sharply by 1.17% on Monday, after a session placed under the sign of caution but reinvigorated in the last exchanges by a jump in banking stocks.

The CAC 40 index gained 73.50 points to 6,358.74 points. On Friday, the Parisian rating had rebounded slightly by 0.20%, but posted a negative balance of 1.22% over the week.

On Monday, the stock market had started the session in the green, before falling below its levels of the day before, in the morning, then stabilizing. The CAC 40 finally rose in the last hour of trading, driven by banks taking advantage of the tougher stance of the European Central Bank (ECB).

Daniel Larrouturou, equity manager at Dôm Finance notes an “irregular session, which shows the indecision of investors”.

Uncertainties regarding the evolution of global growth and inflation continue to complicate the course of action for investors.

To stem the spiral of rising prices, ECB President Christine Lagarde announced that the first rate hike should be decided in July and that the era of negative rates should end by “the end of the third quarter “.

The declaration caused the euro to jump by more than 1% against the dollar and strengthened banking stocks, without upsetting the equity or bond markets too much.

“The firm tone of the ECB was relatively expected and in line with the latest statements, so it’s more of a confirmation than a surprise” for the markets, believes Daniel Larrouturou.

The CAC 40 index was also helped by “statements from Biden, who indicated that he could remove certain taxes on Chinese imports in order to somewhat relieve inflationary pressures in the United States”, underlines Mr. Larrouturou.

During a visit to Japan, the American president also judged that a recession could be avoided in the United States, despite the high inflation that the country is currently experiencing and which is pushing the American Federal Reserve (Fed) to tighten its monetary policy by more aggressive way.

Leading banks

Christine Lagarde’s announcements on rates “strengthen the euro and the banks”, according to Konstantin Oldenburger, analyst at CMC Markets.

Societe Generale (+4.25% to 25.54 euros), BNP Paribas (+4.16% to 52.12 euros) and Crédit Agricole (+3.75% to 10.78 euros) all finished in the Top5 of the strongest increases in the CAC 40.

Vinci backs down, a subsidiary targeted for “private corruption”

Vinci lost 1.21% to 89.86 euros. Its subsidiary Vinci Construction France was indicted in February for “private corruption”, the Nanterre prosecutor’s office said on Friday.

© 2022 AFP

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