Cac 40: The Stock Exchange Releases Ballast Amid Sanctions Piling Against Russia

(BFM Bourse) – Weighted by banking, automotive and aviation stocks, especially those most exposed to Russia, CAC 40 erases his recovery from the last two sessions after the announcement of new sanctions against Russia.

Last Tuesday it managed to free itself from its “range” around 6,600 points to return to its pre-Russian invasion of Ukraine levels, the CAC 40 returned nearly 100 points on Tuesday, still against the background of the evolution of the war and the accompanying sanctions against Moscow. After two sessions of gain, Friday (+0.37%) and Monday (+0.70%), the barometer of the Parisian place is this Tuesday, 1.28% decline to 6,645.21 points, in a volume of exchanges that, however, in the afternoon (4.1 billion over the session).

“It is a week of transition for the Paris stock exchange. Important economic announcements are scheduled for next week (inflation in the United States, meeting of the European Central Bank, etc.),” said Christopher Dembik, director of research macroeconomics at Saxo . Bank. “Despite the rebound in technology-related stocks in the United States, European indices should open this morning without any real trend as investors have decided to put the war in Ukraine aside for now,” said John Plassard, Deputy Investment Director at Mirabaud, in his morning note. the CAC 40 in fact it evolved close to equilibrium to 10 hours before tipping into the red. Still, the expert wonders until when the operators will ignore information from Ukraine.

An element of reaction emerged in the afternoon, with the promulgation of new international sanctions in response to the discovery this week of mass killings of civilians blamed on the Russian military in several towns on the outskirts of Kiev, including Boutcha. The United States has stepped up pressure on Moscow by banning Russia from Tuesday from repaying its debt with dollars in US banks, raising the risk of a Russian default. At the same time, the European Commission on Tuesday proposed to the Twenty-seven to tighten sanctions against Moscow by halting their purchases of Russian coal, which represent 45% of EU imports, and by closing European ports to Russian ships.

These new economic reprisals have prompted investors to once again exit the tricolor stocks most exposed to Russia, starting with: Renault (-6.2%) and Societe Generale (-5.7%).

On the statistical side, investors had the PMI indices (from the survey conducted by IHS Markit and S&P Global) regarding private sector activity in the zone euros to sink their teeth into this Tuesday morning. In France, this indicator stood at 57.4 in March, in line with the “flash” estimate, after 55.5 in February – the 50-point threshold, as a reminder, the line between expansion and contraction in activity. “Growth accelerated in the sector in March, with the new lifting of health restrictions, especially the abolition of the ‘vaccination pass’, which has supported activity and boosted demand,” said Joe Hayes, senior economist at S&P Global. † Same sighting in the area euros, where service sector activities were supported by the lifting of pandemic-related measures. However, the survey finds that March’s recovery is threatened by rising energy costs following the Russian military’s invasion of Ukraine.

Outstanding Banking Securities

Little news to report this Tuesday on the securities front in Paris, a week before the “official” launch of a new season of results, for the first quarter of 2022, with in particular LVMH Tuesday and Hermès Thursday.

By sector, it is the bank shares that are (still) struggling this Tuesday afternoon, Agricultural credit (penalized by an amendment to AlphaValue’s recommendation) and BNP Paribas with a yield of 5% and 4.6% respectively in the wake of Societe Generale, despite a further rise in bond yields. STMicro also fell by 5.3% after the fire (the trail of a voluntary act is privileged) of several power lines in Isère that affected the power supply of the semiconductor specialist’s factories, as well as that of its competitor soitec (-3.7%).

Among other things, sharp declines, Veolia fell by 5.3% and the aviation sector was also hit (-4.4% for Airbus-3.2% for Saffronholy gobain and Stellantis return in turn 4.3% and 3.7%.

Orpea is making headlines again after 80 complaints from residents’ families were filed Monday before the Nanterre prosecutor’s office against the retirement home giant, charged with “endangering others” and “manslaughter”. The title drops by 6.1% and again leads that of its competitor Korian in its wake (-3.2%).

Among the smallest stocks, Medesis Pharma jumped 127% (!) are treatments aimed at large infected or irradiated populations following a civil or military nuclear accident.

Oil changes little

Oil prices wavered on Tuesday, oscillating between red and green, as the EU discusses new sanctions against Moscow as the Commission has proposed the 27 to halt their purchases of Russian coal, but not yet decide on the black gold for now. Getting up in the morning, the barrel of Brent shows a slight decrease around 6:10 PM (-0.3% to $107.2).

Finally, in the foreign exchange market, the single currency continues its violent decline of the past three days, falling back below the $1.10 threshold, dropping another 0.50% to $1.0919.

Quentin Soubranne – ©2022 BFM Bourse

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