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(BFM Bourse) – The Paris Stock Exchange continues to sink new lows. This Monday night, the CAC 40 fell 2.75%, its biggest drop since March 10, and closed below 6100 points. Since the beginning of the year, the three-color flagship index has fallen more than 15%.
Investors see growth prospects deteriorating rapidly, at a time when the imperative to fight inflation will no longer allow central banks to generously support the economy. And a wave of panic is spreading in the stock market. The CAC 40 thus closed on Monday at -2.75% to 6,086.02 points on a traded volume of 3,700 million euros. The Paris star index has not experienced such a drop since March 10 (-2.83%).
A panic movement fueled by the evolution of monetary policies
The future evolution of monetary policies remains the biggest concern for investors, underlines the team of strategists at La Banque Postale Asset Management, as well as the possible danger of a more pronounced slowdown in activity than expected, or even the possibility of a recession This outlook also gained ground at the end of the week with the Bank of England forecasting a 0.25% drop in GDP in 2023, while inflation would remain very high. “The prospect of a recession as inflation recedes ever so slowly has helped drag nearly every asset class down over the past week. Interest rates have risen sharply, driving down bond values as they stock markets were falling sharply. This volatility is likely to remain very present.”
In this context, the LBPAM considers that “prudence should prevail in asset allocation.” “We think it is important to maintain a very defensive exposure, still favoring reasonable valuations in equities in the face of growth concerns and rising interest rates that we have just experienced. At the same time, it is important to note that the latest jobs data April data continue to confirm the strength of the labor market across the Atlantic, which should support growth for a while, although this should consolidate the rapid tightening of monetary policy initiated by the Fed”.
85% of values in red
Without strong news on the corporate side, almost 85% of the main Parisian stocks fell, again without a marked sectoral trend, with the main declines corresponding to companies in sectors as disparate as payment services (Worldline – 4.87%) or technological values (Dassault Systèmes -4.78%), luxury goods and cosmetics (-3.67% for L’Oréal) or electrical and digital infrastructures for buildings (Schneider -4%). Oil stocks also fell, with TotalEnergies shedding 4.87% on the back of a more than 5% drop in oil prices on fears of slowing Chinese demand.
In this unattractive context, the health sector seems to recover the attractiveness of its defensive nature. Coming from Sanofi, the specialist in the production of active pharmaceutical ingredients Euroapi took the opportunity to gain 2.1% in its second session while JPMorgan strongly recommends the title, which it considers very low compared to its peers. A potential customer (if its development projects lead to drugs), Adocia, was also sought after on Monday: the Lyon-based biotech announced the start of a phase 3 trial (last stage of clinical trials before possible commercialization). for ultra-fast absorption. insulin in association with Tonghua Dongbao, China’s leading insulin producer. The stock rose 4.55%. Eurofins Scientific for its part gained 0.3%.
A rare survivor among industrial stocks, Alstom gained 1.9%. The Baden-Württemberg transport authority has ordered 130 Coradia Stream regional train sets from the French group for €2.5bn, excluding a potential increase as an option for up to 100 additional trains has been put in place.
The operators also bet on the Ateme file, which signs a fifth consecutive session of rise, as a result, in particular, of the elevation of its growth objective for this year to a range of between 15 and 20%. The stock closed up 4.63% at 14.02 euros.
Also among the few significant increases, Europlasma gained more than 10% following positive results in aluminum recycling.
After climbing this Friday to the highest since the beginning of March, oil prices fell to 104 dollars for WTI (-5.93%) and 106.84 dollars for Brent (-5.64%), weighed down by fears of a drop in demand for black gold as a result of sanitary measures in China to fight against a resurgence of Covid-19.
On the currency side, the 1.05 dollar zone once again served as support for the euro, which returned to 1.0570 dollars.