The Paris Stock Exchange fell below 7,000 points on Thursday, hampered in its early-year momentum by messages of steadfastness from central bankers in their battle against inflation and lackluster statistics in the US.
The CAC 40 star index fell sharply Thursday, 1.86% to 6,951.87 points, after rising sharply (more than 7%) since the beginning of the year.
This “closure may be triggered by less good macroeconomic indicators and speeches by central bankers who persevere on the path of monetary tightening”, but “it doesn’t call everything into question again”, comments Andrea Tuéni, analyst at Saxo Bank.
Several US economic indicators have come in recent days to show a slowdown in the world’s largest economy.
Released on Wednesday, data on industrial production and retail sales contracted more-than-expected.
On Thursday, another index, in the real estate sector, added to the gloom. Housing fell 1.4% in December over a month, after already falling 1.8% the previous month, a figure revised sharply downwards. Furthermore, a rebound is unlikely given that even building permits, which give an idea of future beginnings, are down by 1.6%.
Investors thus have “a good excuse to slow down and take profits before assessing the situation”, being busy next week in terms of corporate results before giving way to meetings of European and American central banks in early February.
The market has been expecting a more accommodating monetary policy from central banks since the beginning of the year, but without any guarantees.
Central bankers have been reiterating for two days their determination to remain vigilant against inflation, be it James Bullard for the US Federal Reserve or Klaas Knot, one of the governors of the European Central Bank (ECB).
At the Davos Economic Forum, ECB President Christine Lagarde said activity in the eurozone this year will be “much better” than initially feared. You also reiterated that the monetary institution plans to further raise the reference rates during the next meetings, with an expectation of +0.50 percentage points, to counter inflation “still too high”.
The defensive values sought
Defensive stocks such as Pernod Ricard (+0.65% at €192.30) and Danone (+0.46% at €50.21) stand out.
Conversely, cyclical stocks, the most sensitive to economic activity, up sharply since the beginning of the year, fell: Renault by 2.23%, Saint-Gobain by 2.61%, Schneider Electric by 3.61%.
Banks were also affected by doubts about the strength of the economy, with a decline of 2.10% for Société Générale and 1.24% for BNP Paribas.
Thales at the top of CAC 40
Thales (+1.59% to 118 euros) declared Wednesday that it will modernize the fleet of CN-235 twin-turboprop tactical and logistic transport aircraft of the Air Force and Space with Sabena Technics.
Accor sells shares in China
The hotel giant Accor (+1.33% to 28.88 euros) announced Wednesday that it had sold its remaining 3.3% stake in the Chinese company H World Group, formerly Huazhu, for an amount of 460 million dollars, realizing an important added value, while remaining its partner in China.