The control room of Euronext, the company that manages the Paris Stock Exchange (AFP/Archives/ERIC PIERMONT)
The Paris Stock Exchange fell 1.33% on Tuesday, weighed down by a sharply declining luxury sector and by economic statistics which reveal weaknesses in the European manufacturing sector.
The star CAC 40 index lost 99.45 points to 7,378.71 points, its lowest closing level for two weeks. On Monday, it ended down 0.18%.
Economic growth in the private sector in the euro zone slowed in May, reaching its lowest level in three months, weighed down by the drop in industrial production, according to the Flash PMI index published on Tuesday by S&P Global.
The French economy continued to grow in May, but at a slower pace than the previous month due to a slowdown in the services sector, according to the provisional PMI index published on Tuesday by the agency S&P Global. The slowdown in services is a little more pronounced than expected by economists surveyed by data provider Factset.
“The European manufacturing sector is suffering from the current context and from declining demand at the global level”, “order books are down and the backlog of production to be manufactured is in the process of decreasing”, underlines Charlotte de Montpellier, economist of ING France.
In addition, the Parisian rating was particularly weighed down by the sharp drop in luxury values: -6.54% for Hermès at 1,890.20 euros, the worst performance of the CAC 40, -5.01% for LVMH at 834.20 euros, -2.97% for Kering at 525.90 euros.
They suffered from a rating by Deutsche Bank analysts who believe that valuations are high in the sector, which had risen strongly this year on the prospect of a strong economic rebound in China with the end of the anti-Covid restrictions. .
But “in China, the recovery is running out of steam, unemployment remains high, there is growth but not the expected boom”, recalls Charlotte de Montpellier.
The prospect of an economic slowdown in the United States is also a source of concern for analysts at Deutsche Bank.
“All the indicators point to an economic slowdown, and even if this slowdown is not there yet, investors are asking questions about the sectors which had progressed very strongly in recent months, such as luxury”, explains Charlotte de Montpellier.
She finds it “quite rational from an investor perspective to start being more selective” among the luxury sector.
Vivendi sold
Vivendi shares fell 3.60% to 9.10 euros, after falling 9% at the start of the session, in the wake of share sales by a company linked to Vincent Bolloré, while investors expected the opposite to a capital increase.
The Cornouaille company, “linked to Vincent Bolloré” according to the description of the Financial Markets Authority in a notice published Monday after the close of markets, sold more than 1.5 million shares, or around 0.14 % of Vivendi’s capital.
Casino suspended
The action of Casino remained suspended throughout Tuesday’s session, at the request of the distributor in difficulty who gave himself until 5 p.m. to launch a possible conciliation procedure with his creditors.
Rallye (stable at 1.03 euro), Casino’s parent company, announced Monday evening that it had obtained the opening of conciliation proceedings with its creditors.
© 2023 AFP
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