(BFM Bourse) – Sino-American tensions are a pretext for a breather in global stock market indices. Author of a nice rebound at the end of the week, the CAC 40 lost more than 1.3% on Monday evening.
The enthusiasm that prevailed on the Parisian market at the end of the week immediately fell like a soufflé. The Paris Stock Exchange fell sharply throughout this first session of the week, weighed down by Sino-American tensions but also by the prospect of a continuation of key rate hikes by central banks.
The CAC 40 thus fell by 1.34% on Monday evening to 7,137.10 points, after having gained nearly 2% the previous week.
Sino-American tensions weigh. The United States shot down a Chinese balloon that had been flying over their soil for several days on Saturday, calling it a “spy” balloon, which Beijing denies, assuring that it was a weather surveillance aircraft that had deviated from its trajectory.
“This renewed tension between China is the perfect excuse for the market to consolidate while the news of the week will be mainly driven by corporate results,” said Christopher Dembik, head of economic research for Saxo Bank.
“It’s the perfect element to take your gains”, abounds Alexandre Baradez, analyst at IG France. “There are also the consequences of Friday: the rate on [l’obligation souveraine américaine] to two years has recovered markedly after a better than expected employment and ISM manufacturing index. Market expectations for the move in Federal Reserve rates have shifted sharply: the market was expecting a 30% hike of 25 basis points (0.25 percentage points) in May, this figure then rose to 60 %” he continues.
Last week, the US (Fed) and European (ECB) central banks indicated that they expect further rate hikes in the coming months. Moreover, the publication of the solid US employment report threw a chill on Friday. Figures that have showered the hopes of operators who were considering a break from the Fed in its rate hikes.
On the bond market, these fears are reflected in a sharp rise in sovereign bond rates. The yield on the 10-year US bond is 3.623% while that of the French OAT of the same maturity is rising to 2.743%.
How far will Orpea’s drop go?
As for values, Rotschild & Co jumped 16.8% as the Rothschild family decided to launch a simplified takeover bid with a view to removing the investment bank from the Parisian rating.
Orpea still dropped 17.9% after an agreement on financial restructuring was tied. The dilution of more than 99% is gradually digested by the market.
More broadly, red is appropriate for all CAC 40 stocks with the exception of Renault (+0.3%). Nissan has indicated that it would take up to 15% of the capital of Ampere, of which the diamond brand intends to control the majority. Carrefour (+0.1%) and Thalès (+0.04%) complete the top three.
On the other markets, the euro continued its decline and lost 0.7% against the dollar at 1.0719 dollars. Oil contracts are moving higher after slipping more than 8% last week. The April contract on Brent from the North Sea for delivery in April, takes 0.7% to 80.47 dollars a barrel while that of March on WTI quoted in New York advances by 0.35% to 73 .65 dollars a barrel.
Sabrina Sadgui – ©2023 BFM Bourse
