Cac 40: Paris market loses more than 2%, Wall Street fears recession

(BFM Bourse) – The central banks’ battle against inflation has equity markets as collateral victims. The Paris Stock Exchange, which had just snapped a streak of six sessions in the red the previous day, began to fall again, closing Thursday at -2.4%.

Galloping inflation has pulled the planet’s various fundraisers out of the forest, urged to intervene to put out the fire. On Wednesday, the Fed formalized a rise of 0.75 percentage points (unpublished since 1994), after the 0.50 points of May. In the night, the Central Bank of Brazil raised its rates for the eleventh consecutive time. Banque auriverde was followed a few hours later by the Swiss National Bank, which began its monetary tightening cycle. It proceeded, for the first time in 15 years, to a monetary turn of the screw by lowering its reference rate from -0.75% to -0.25%. The Central Bank of England did not stop doing the same, operating a fifth rate hike in as many meetings. This tightening of monetary policies causes tensions in the bond market and undermines the valuation of equities. Finally, this Thursday, the ACC 40 thus lost 2.39%, to 5,886.24 points. The star index of Paris raises its annual losses to more than 17%.

The week of the central bankers will end on Friday with the decision of the Bank of Japan, which currently follows a monetary policy diametrically opposed to that in force in other countries of the world.

“Stock markets are experiencing another day of pain on Thursday as central banks continue to show a willingness to sacrifice the economy to control inflation,” notes Craig Erlam. The SNB’s rise was perhaps the most surprising of all, with the consensus that the Swiss central bank would not move to prevent a further strengthening of the Swiss franc, fueled by the flight to safer assets, the decision of the Bank of England seemed almost soft, the institution recognized that inflation should now exceed the 11% for October through the Channel, without showing any desire to accelerate the tightening by not rising more than 25 basis points again.

Across the Atlantic, the purge reached 4.2% on the Nasdaq, 3.5% on the S&P 500 and almost 3% on the Dow, the indices completely reversing compared to the rather unexpected rally Wednesday night after the Fed’s announcement.

Across the Paris stock exchange, alone orange floated (+0.3%) among the 40 flagship stocks. Engie suffered the biggest drop, with a return of almost 7.3%, as the group announces that it has seen a drop in gas deliveries after restrictions on Russian blue gold.

Rexel, a potential candidate to join the index a day after joining its antechamber, the Next20, raised its growth and profitability targets for this year. But the distributor of electrical material, which rose 3% at the opening, finally did not resist the tidal wave, yielding 3.7%.

The black series continued atos (-7.3%) always in the wake of the forthcoming departure of its managing director and the plan to split the company into two independent publicly traded entities. Since the beginning of the year, it has sunk by more than 66%. Finally, many speculative files were violently attacked, such as Navya falling by almost 35% or less. cybergun Y Gaussin (-9% each).

undecided oil

On the small-cap side, Xilam Animation limited the fall to -1.6% while Marc du Pontavice’s studio has been selected by Disney+ to supply two new exclusive animated series.

The price of oil evolved in a scattered order, to 116 dollars for the WTI and $118.5 for the Brent. The single currency, penalized on Wednesday by the Fed’s turn of the screw on rates, was able to rise 0.8% to $1.0530 at the end of the day. On the cryptoactive side, Bitcoin it was exhibited again below 21,000 dollars (-3.6%).

Guillaume Bayre – ©2022 BFM Bourse

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