The Paris Stock Exchange finds the heights, at the risk of running out of oxygen

At 7,387.29 points in session, Thursday, February 16, the CAC 40 index of the Paris Stock Exchange recorded a new record, exceeding its levels of January 2022, before the war in Ukraine brought down the world markets. At this level, it shows an increase of 13.8% since the 1er January, and by almost 29% since its low point at the end of September 2022.

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“ Everyone was surprised by the strength of the rebound. It’s one of the best starts to the year we’ve had in history.”, notes Raphaël Thuin, Director of Capital Markets Strategies at Tikehau Capital. This spectacular rise is partly explained by the reception given by investors to the annual results of several heavyweights on the stock market, such as TotalEnergies, BNP Paribas and Carrefour.

Above all, this rebound is based on the improvement in the “fundamentals” of the markets: fears of energy shortages have faded, inflation has started to slow on both sides of the Atlantic and the rate hike cycle rate initiated in 2022 by the major central banks is now well advanced.

IMF growth forecast revised upwards

“The bulk of the rate hike is now behind us in the United States and we are more than halfway there in Europe. The monetary winds will therefore be a little less contrary in 2023 and the markets are projecting themselves towards a second half in which the central banks will be rather in “pause” mode.sums up Vincent Juvyns, strategist at JP Morgan Asset Management.

The Paris Stock Exchange, like the other major European markets, also appreciated the upward revision of economic growth forecasts from the International Monetary Fund and the European Commission. Nevertheless, for observers, the main fuel for the rise remains the reopening of the Chinese economy.

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“ In China, there is a very significant lag in consumption and strong accumulated savings. We therefore believe that there will be a very strong rebound in consumption [là-bas]with a direct impact on our major prestige and luxury brands says Frédéric Rollin, investment strategy advisor at Pictet & Cie.

Concern of many SMEs in Europe

The “KHOL” (for Kering, Hermès, L’Oréal and LVMH), indeed represent nearly 25% of the overall capitalization of the CAC 40. “ These values ​​take full advantage, whether from the point of view of results or that of visibility, of the strategic change in health policy in China.observes Alexandre Hezez, strategist at Groupe Richelieu.

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