Cac 40: Panic wind on the Paris stock exchange, falling by 2.75%

(BFM Bourse) – The Paris stock market continues to fall to new lows. This Monday night is the CAC 40 fell 2.75%, the biggest drop since March 10, and closed below 6100 points. Since the beginning of the year, the tricolor flagship index has thus fallen by more than 15%.

Investors are seeing the growth outlook rapidly deteriorating at a time when the need to fight inflation will no longer allow central banks to generously support the economy. And a wave of panic is spreading in the stock market. the CAC 40 closed this Monday at -2.75% at 6,086.02 points in a traded volume of 3.7 billion euros. The Paris star index hadn’t fallen so much since then on March 10 (-2.83%)

The move took over all European markets, Frankfurt lost 2.15%, London 2.32%, Milan 2.74% and the European benchmark, the Eurostoxx 50 2.82%. At the same time, the US markets were not spared the decline. On Wall Street, the Nasdaq accelerated its fall, falling 3.50% at the time of the European close, while the Dow Jones lost 1.58% and the S&P 500 lost 2.43%. On the cryptocurrency side, the Bitcoin slumped to its lowest level since July 2021, about $32,000 this Monday around 6 p.m.

A movement of panic fueled by the evolution of monetary policy

The future evolution of monetary policy remains the main concern for investors, the team of strategists at La Banque Postale Asset Management points out, as does the potential danger of a more pronounced slow-down in activity than expected, or even the possibility of a recession. This perspective also gained ground at the end of the week with the Bank of England forecasting a 0.25% GDP decline in 2023, while inflation would remain very high. “The prospect of a recession as inflation declines very slowly has helped nearly every asset class pull down over the past week. Interest rates have risen sharply, causing bond values ​​to fall as stock markets plummet. is likely that this volatility will remain very present”.

In this regard, LBPAM believes that “prudence should prevail in asset allocation”. “We believe it is important to maintain a very defensive exposure, still favoring reasonable valuations of equities in light of the growth concerns and rising interest rates that we have just experienced At the same time, it is important to note that the most recent US employment data for April continues to confirm the robustness of the job market across the Atlantic, which should support growth for a while, even if it does not reflect the rapid tightening of jobs. should consolidate the monetary policy initiated by the Fed”.

85% of the values ​​in red

With no strong business news, nearly 85% of key Paris stocks have fallen, again without a clear sector trend, with the main declines going to companies from sectors as diverse as payment services (Worldline – 4.87%) or technology stocks (Dassault Systèmes -4.78%), luxury goods and cosmetics (-3.67% for L’Oréal) or electrical and digital building infrastructures (Schneider -4%). Oil stocks also faltered TotalEnergies yielding 4.87% in the wake of the more than 5% drop in the price of black gold amid fears of a slowdown in Chinese demand.

In this unattractive context, the healthcare sector seems to be regaining the attractiveness of its defensive character. By SanofiEuroapi, the specialist in the production of active pharmaceutical ingredients, benefited, with a gain of 2.1% for its second session, while JPMorgan warmly recommends the title, which it considers highly discounted compared to its peers. A potential customer (if his development projects lead to drugs), Adocia, was also wanted on Monday: The Lyon-based biotech announced the start of a phase 3 study (final phase of clinical trials before possible marketing) for its ultra-fast absorption insulin in partnership with Tonghua Dongbao, the first Chinese insulin producer. The stock rose 4.55%. Eurofins Scientific in turn won 0.3%.

Rare survivor among industrial values, Alstom 1.9% won. The Baden-Württemberg Transport Authority has ordered to the French group 130 Coradia Stream regional train sets for 2.5 billion eurosexcluding a possible increase since a option was laid to accommodate up to 100 additional trains.

The operators are also betting on the Ateme stock, which will sign a fifth consecutive rally, especially in the wake of raising its growth target for the current fiscal year to a range between 15 and 20%. The share closed 4.63% higher at 14.02 euros.

Also one of the rare significant progressions, Europlasm more than 10% won after positive results in the recycling ofaluminium

After climbing to their highest since early March on Friday, oil prices fell back to $104 for the WTIA (-5.93%) and $106.84 for the Brent (-5.64%).

On the exchange rate side, the $1.05 zone again served as support for theeuros which came back to about $1,0570.

Sabrina Sadgui

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