The Paris Bourse dropped 0.83% on Friday morning, hampered by a poor economic indicator, in addition to the aggressive tone adopted by the European Central Bank (ECB) on Thursday.
The star CAC 40 index fell 53.87 points to 6,468.90 points, falling to its lowest since November 10. On Thursday, it had fallen more than 3%, its biggest drop since March 4.
Private sector activity contracted more than expected in December, penalized by the services sector, and reached its lowest level since February 2021, according to the PMI Flash indicator published Friday by the firm S&P Global .
A data that was received negatively by the actors of the Paris Stock Exchange already worried that the rate hikes carried out by the central banks would push the economy towards recession.
The decline in private sector activity in France, the euro zone’s second largest economy, is increasing the risk of recession in the region, worries Joe Hayes, an economist with S&P Global, quoted in the press release published on Friday.
On Thursday, the ECB raised its rates by 0.50 percentage points, a moderate increase after two increases of 0.75 points, but its president Christine Lagarde multiplied the formulas to send a message of firmness and reaffirm that the fight against inflation is not over.
It’s the end of a half, it’s not the end of the game against rising prices, added Friday on BFM Business the governor of the Banque de France, Franois Villeroy de Galhau, estimating that probably several Upsides are yet to come as the European economy is actually more resilient than feared.
ECB President Christine Lagarde has killed all hope that the ECB will take the economic slowdown and recession into account when raising rates, reports Ipek Ozkardeskaya, an analyst at Swissquote Bank.
The European Central Bank has also raised its inflation forecasts for the coming years and does not expect to reach its 2% target, even in 2025.
These announcements, coupled with equally strict announcements from the US Federal Reserve and poor macroeconomic data showing a slowdown in US economic activity, paint a grim picture for the economy in the months to come.
Worried about the risks of recession, the Wall Street indices fell Thursday from 2.25% for the Dow Jones to 3.23% for the Nasdaq.
Euronext spins off a business
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The pan-European stock market operator Euronext announced Thursday the sale of MTS Markets International, an American subsidiary acquired during the takeover of the Milan Stock Exchange. This operation is part of the desire to part with non-essential assets defined following a strategic review. The title lost 2.96% 68.14 euros.
CMA CGM on M6
The French maritime transport group CMA CGM now holds 5.02% of the capital of the television and radio group M6 (-1.18% to 14.25 euros), according to the declaration of threshold crossing published by the Financial Markets Authority (AMF).
A single head at Nexity
Vronique Bdague, CEO of Nexity since May 2021, will take over as sole head of the group by becoming CEO, the leading French property developer announced on Thursday. Nexity shares fell 2.10% to 24.30 euros.