The control room of Euronext, the company that manages the Paris Stock Exchange (AFP/Archives/ERIC PIERMONT)
The Paris Stock Exchange ended down 0.42% on Wednesday, reacting little to data on inflation in the United States in August, on the eve of the next decisions by the European Central Bank (ECB) on its monetary policy.
The flagship CAC 40 index dropped 30.31 points to 7,222.57 points. The day before, it had lost 0.35%.
“It was a wait-and-see session. If inflation in the United States had been below expectations, we would have gone into the green, in the hope that this would influence the decision of the European Central Bank (ECB) tomorrow,” estimates Philippe Cohen, portfolio manager at Kiplink Finance.
But the consumer price index in the United States rose to 3.7% over one year, compared to 3.2% in July, according to the CPI index published Wednesday by the Labor Department, a little more than the 3.6% expected by analysts, according to the Market Watch consensus.
“The acceleration observed is mainly linked to the rise in oil prices, which was the biggest contributor to inflation” in August in the United States, comments Philippe Cohen.
“It’s an increase that can be described as cyclical,” continues the analyst, which does not arouse investors’ fears before the next meetings of central bankers in Europe on Thursday and in the United States next week.
Thus, “if the renewed rise in energy prices is likely to raise questions and justify an ever-vigilant posture of the Federal Reserve (Fed), this report on consumer prices for the month of August should not hinder its apparent desire to take a break” in its rate increases in September, judge Véronique Riches-Flores and Thomas Bauer of RichesFlores Research.
However, on the ECB’s side, “we think that it could raise its rates two more times” by the end of the year, estimates Philippe Cohen.
Banking stocks on the rise
French banks were trending upwards on Wednesday. Axa closed up 1.55% to 28.58 euros, Société Générale gained 0.94% to 26.20 euros and Crédit Agricole 0.82% to 11.54 euros. For good reason, “bankers expect a continued rise in rates which would allow them to strengthen their margins,” comments Philippe Cohen.
The auto sector supported by the EU against China
Pressed by France, the President of the European Commission Ursula von der Leyen announced on Wednesday the opening of an investigation into Chinese subsidies for electric cars, a gesture welcomed by EU manufacturers who denounce unfair competition.
Renault was at the top of the CAC 40 and ended up 2.07% at 37.50 euros, Forvia gained 0.60% to 20.23 euros and Plastic Omnium 0.31% to 16.14 euros.
Alstom degraded
Alstom’s share price fell 3.89% to 23.22 euros after British bank Barclays revised its share price target downward to 16.50 euros per share, below its current value.
© 2023 AFP
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