The control room of Euronext, the company that manages the Paris Stock Exchange (AFP/ERIC PIERMONT)
The Paris Stock Exchange ended lower on Tuesday, unable to continue its run amid the World Bank’s pessimism about global growth in 2023 and the approach of a major meeting on US inflation.
The CAC 40 star index fell 0.55%, or 38.22 points to 6,869.14 points after returning the day before above 6,900 points for the first time since February 18, 2022, before the Russian invasion of the Ukraine.
The ardor that European markets have shown since the start of the year seems to be abating to be more in tune with the mood on Wall Street.
“For now, the market is absorbing the bullish phenomenon at the start of the year and focusing on the end of the week,” Frédéric Rozier, portfolio manager at Mirabaud France, told AFP.
The diary will fill up at the end of the week with consumer prices for December and US weekly jobless claims.
After a complicated 2022, the markets have many things to consider: the risks of a recession, the level of interest rates and that of inflation, the health risk in China after the end of its zero Covid policy and the geopolitical risk with the war ongoing Ukraine.
“While the avalanche of macroeconomic data during the first week of the year tended rather to confirm the decline in inflationary pressures on both sides of the Atlantic, which is a positive sign, the path to normalized inflation is still long to confirm. said Thomas Giudici, head of bond management at Auris Gestion.
On Monday, US central bank (Fed) officials reiterated their desire to keep interest rates high for some time to stem the rise in prices, curbing investors’ appetite for risk.
The US consumer price index for December, to be released on Thursday, is this week’s key macroeconomic data.
Analysts are expecting a steady month-to-year and year-over-year slowdown to 6.5%, which would bode well for equities.
On Tuesday, the World Bank sharply revised its forecast for global growth for 2023, which it now anticipates to 1.7% from 3% last June, due to persistent inflation, rising rates and the effects of the war in Ukraine. Only a moderate global recovery is expected in 2024 (+2.7%).
The trend could worsen further, with a real risk of recession, in the event of a new shock to the economy, be it caused by a recovery in inflation, a new wave of Covid or geopolitical tensions.
During the session of the Paris Stock Exchange, profits were taken on cyclical stocks such as Saint-Gobain (-2.40%), Michelin (-1.80%) and Legrand (-1.81%).
The share of global optical giant EssilorLuxottica drops by 1.82%, to 172.65 euros, penalized by a note from RBC analysts who believe that the stock could experience a less solid year 2023 than 2022 due to the ‘reversal of positive factors.