The Paris Stock Exchange rebounded frankly on Tuesday, after the stress of the last two sessions, reassured about American inflation and the risk of contagion in the banking sector after the bankruptcy of the American Silicon Valley Bank (SVB).
The star CAC 40 index recovered 1.86% after losing more than 4% on Friday and Monday sessions.
The US inflation figure came out as expected and the domino effect of US regional banks is fading, giving investors some breathing room, Swann Capital partner Lionel Melka told AFP.
Investors are coming to their senses, but they want to see this crisis go away and will follow the meeting of the US Federal Reserve next week, adds the expert, estimating that a further rate hike of 0.25% or a status quo will depend on the prevailing climate at the time.
Already weakened by a hardening of tone of the American central bank last week, the stock markets fell sharply on Friday and Monday, shaken by the collapse of three American regional banks including Silicon Valley Bank (SVB).
Changing economic data and confidence in the Fed’s ability to manage the slowdown in the US economy will continue to influence market direction, said Stephane Monier, head of investment at Lombard Odier.
The head of the US central bank (Fed) had suggested last week that he was ready to step up his action against inflation, suggesting that the institution’s rates could be pushed higher and for longer than expected so far. and that his decision would depend on new economic data.
Before the SVB bankruptcy, the market was still wondering if the rate hike could reach 50 points at the next meeting on March 21 and 22, an option now dismissed by investors who are leaning more towards a 25 point hike or even a pause in monetary tightening.
On the bond market, the yield on the 10-year French government bond rose sharply to 2.97% after its fall in the last two days. More sensitive to variations in monetary policy, the 2-year rate rose again above 3%, against 2.78% at the close on Monday.
Appeasement in the banking sector
Bank stocks were recovering from their cold sweats caused by the bankruptcy of the American bank Silicon Valley Bank (SVB). According to the financial rating agency Moody’s, the disruptions experienced by the American banking sector should have a limited impact on European establishments, which are organized differently. BNP Paris took over 3.08% to 57.88 euros and Socit Gnrale +2.26% to 24.48 euros.
The defense benefits from cheap purchases
The defense sector, sought after in the current geopolitical context, benefited from cheap buying after the declines of the last two sessions, according to Mr. Melka. It formed the leading trio in the CAC 40 with Thales (+3.80% 132.40 euros), Safran (+3.53% 133.14 euros) and Airbus (+3.40% 122.18 euros).
The European aircraft manufacturer delivered 46 commercial aircraft to its customers in February, picking up some color after a disastrous month of January, and recorded 99 new orders.
Icade in shape
Icade, the real estate subsidiary of Caisse des Dépts, announced on Monday an agreement with the real estate management company Primonial REIM for the sale of its healthcare subsidiary. The company will receive approximately 1.2 billion euros in capital gains, of which 70%, or 710 million euros, will have to be redistributed to its shareholders as exceptional dividends. The action gained 4.69% to 48.66 euros.