The Paris Stock Exchange jumped 2.30% on Wednesday, the third session in a row, particularly optimistic after the slowdown in inflation in France in December and the drop in gas prices, to their lowest since 2021.
The CAC 40 star index rose 152.54 points to 6,776.43 points, bringing its week-to-date gain to 4.68%. In 2022, the Parisian index suffered the worst annual decline (-9.5%) since 2018.
Franklin Pichard, chief executive officer of Kiplink Finance, notes a “change of mindset among investors in the eurozone”.
Inflation in France slowed in December, to 5.9% over one year, against 6.2% in November, according to the provisional estimate published on Wednesday by INSEE.
More good news came the day after the announcement of a stronger-than-expected price drop in Germany in December, which took the inflation rate of Europe’s largest economy below 10% for the first time since August. The increase in the price index reached 8.6% in one year, losing 1.4 points compared to November.
Many market players “imagine that the situation in Europe could improve and that the worst is over,” adds Pichard.
The dynamics of the European markets are in total contrast with the trend at the end of December, when the declines were linked after a harsh intervention by the President of the European Central Bank (ECB).
“The decline in inflation makes investors think that perhaps the ECB will consider that its monetary policy is starting to produce its effects and that inflation could be a little lower than expected,” explains the Kiplink Finance expert.
Furthermore, expectations of lower inflation are being fueled by lower gas prices. Europe’s benchmark natural gas contract, the Dutch TTF, hit its lowest since late November 2021, erasing gains made in 2022 in the wake of the war in Ukraine.
At around 17:00 GMT it was worth €64.60 per megawatt-hour, down 10.67%.
In response to the bond market, the French 10-year debt rate fell from its highs (3.09% at the close of December 30, the highest since 2012). It closed at 2.77% on Wednesday, down from 2.91% at Tuesday’s close.
Investors are also examining the minutes of the last meeting of the monetary policy committee of the American central bank (Fed), expected after the closure of the European markets.
The big green
Many sectors posted strong gains on Wednesday. Starting with luxury, which benefits from lower rates: LVMH +5.01% to 738 euros, Kering +4.48% to 511 euros.
Alstom recorded the largest increase in the CAC 40: +6.46% to 24.72 euros. In the industrial sector, Schneider Electric gained 4.41% to 139.80 euros.
Renault continues to rise, +4.57% to 34.70 euros, as well as Stellantis, +2.69% to 14.18 euros.
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The Casino group has indicated that it has set up, as announced in June 2022, a holding company called CGP Distribution France, in which it will locate its food distribution activities in France. The share lost 0.65% to 10.62 euros.
Carmat, lift up your hearts
The designer of an artificial heart (+5.71% to 11.10 euros) announced the completion of his first implant of his Aeson artificial heart after a suspension at the end of 2021.
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