The Paris Stock Exchange freezes, haunted by central banks

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

The Paris Stock Exchange closed in equilibrium on Tuesday, remaining cautious as in the last two sessions while awaiting the verdict of the American Federal Reserve on Wednesday first, then of the European Central Bank and the Bank of England on Thursday.

The flagship CAC index climbed 0.01% after ending on a limited decline on Monday and without a clear trend on Friday, but its rise has exceeded 9% since the start of the year.

“As for the past few days, the markets have opted for a bit of caution”, before the imminent announcements of three major central banks in the coming days, Ilana Azuelos-Bossard, deputy director at Kiplink Finance, told AFP.

The US central bank (Fed) began its first meeting of the year on Tuesday. A decision on a further hike in key rates is expected on Wednesday.

After several unusually large hikes of half a percentage point and even three-quarters of a percentage point, the Fed is expected to return to a hike of just a quarter point on Wednesday, as economic activity and inflation show signs of slowing down.

Investors will especially watch the speech of the boss of the Fed, Jerome Powell, and “pay attention, if he speaks about it, to the calendar of rate hikes” to come, underlines the expert.

They continue to expect the Fed to take a break from tightening financial conditions later this year and hope to get it right.

Some good news punctuated the session: the IMF was a little more optimistic for 2023 in its global growth forecast and, according to Eurostat, the European economy held up better than expected last year and escaped a recession in last trimestre.

Regarding the meetings of the European Central Bank and the Bank of England which will take place on Thursday, investors expect a further rate hike of 0.5 percentage points.

Profit taking as a sign of caution

Stocks that have risen significantly since the start of the year have fallen under the effect of profit taking, such as ArcelorMittal (-1.92%), Saint-Gobain (-1.59%) and Alstom (-1.63%).

The title Française des Jeux fell 3.70% to 39.25 euros after HSBC downgraded its recommendation on the title to “lighten” against “keep”.

Seb with small onions

The French small appliance giant Seb climbed 7.94% to 95.85 euros, after announcing results the day before that exceeded analysts’ expectations. Its provisional turnover fell slightly by 1.2% in 2022, but Seb is a little more confident about its profitability.

© 2023 AFP

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