(News Bulletin 247) – The CAC 40 was down sharply mid-session as bond yields continued to rise. The good performance of Danone and Stellantis, which published satisfactory annual accounts, helped to limit damage.
The resistance of the CAC 40 is now crumbling. The flagship index of the Paris Stock Exchange fell 0.9% to 7,244.39 points, weighed down by the rise in interest rates.
The latest economic statistics, which are relatively good, lead market operators to fear stronger monetary tightening from the major central banks.
Tuesday’s PMI indices are totally in line with this trend. These numbers “helped push yields [obligataires, NDLR] higher in anticipation that central banks may be a little more inclined to raise rates in the coming weeks, and that seems to be weighing on the markets” this morning, noted Michael Hewson of CMC Markets.
The rise of the American 10-year
Sovereign debt rates are on the rise. The yield on the US 10-year bond is closing in on 4%, at 3.95%, down from below 3.4% at the start of the month. That on the 10-year German Bund is trading at 2.544% against less than 2.1% at the start of February.
“We believe that the possibility of more severe central banks than expected risks putting a spoke in the wheels of risk taking. not be sufficient to avoid the continuation of a squeeze on corporate margins in many sectors and the deterioration of the earnings outlook. We therefore remain cautious in the very short term on risky assets which have become very expensive on the last months,” said Sebastian Paris Horvitz, of La Banque Postale Asset Management.
Featured Danone
In terms of values, if the red is in order, Danone is doing well, gaining 2.8% thanks to results above expectations. Same observation at Stellantis which takes 1.7% with still impressive margins, although slightly down in the second half.
Conversely, Korian collapsed by 19% weighed down by plummeting profitability in 2022 and disappointing prospects due to exceptional costs intended to modernize and diversify its network of retirement homes.
On the other markets, the euro lost 0.1% against the dollar at 1.0634 dollars. Oil prices are falling. The North Sea Brent contract for delivery fell 0.6% to 82.28 dollars per barrel while the WTI contract listed in New York and of the same maturity lost 0.9% to 76.57 dollars per barrel. .
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