(News Bulletin 247) – The CAC 40 fell sharply at the end of the morning, while the banking sector suffered violent releases.
The lull was short-lived. After regaining some ground on Tuesday (+1.9%) the CAC 40 plunged again this Wednesday, falling 2.6% at the end of the morning and dropping below 7,000 points to 6,957.03 points.
The Parisian index is undermined by new fears about the banking sector, BNP Paribas falling by 8.3% and Société Générale by 9%.
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Fear over Credit Suisse
Institutions seem to be driven by the fall of Credit Suisse, which collapsed by 15% on the Zurich Stock Exchange. Saudi National Bank Chairman Ammar Al Khudairy told Bloomberg TV that there was no way his group, Credit Suisse’s largest shareholder with nearly 10%, would inject cash into the Swiss bank if it came to need it.
According to Bloomberg, the price of the Swiss bank’s Credit Default Swaps, instruments used to hedge against the risk of default by a country or a company, has now reached a level “close to signaling serious concerns” from investors.
“Traders are worried about Credit Suisse’s ability to survive (…) and, in the event [où elle ne survivrait pas, NDLR]the magnitude of the crisis that is looming,” said Naeem Aslam of Zaye Capital.
This fall in banking stocks comes to break the rebound started on Tuesday, after all of these securities suffered from fears of the repercussions of the bankruptcy of the bank SVB (Silicon Valley Bank), placed under the control of the American authorities after having suffered massive withdrawals of deposits.
Apart from the banks, almost all the values of the CAC 40 evolve in the red. Alstom and Renault thus lose 6% and 5%.
Bolloré is on fire
Bolloré Group takes its side 7% after announcing a plan to buy back 9.8% of its shares. In response, Vivendi shares lost 5%, as the market believed that Bolloré Group’s decision reduced the probability of a takeover bid by this company on Vivendi.
On the other markets, the euro lost 0.5% against the dollar, at 1.0677 dollars. Oil is changing little, the contract on Brent from the North Sea for delivery in May takes 0.3% to 77.66 dollars a barrel while that of April on WTI listed in New York advances by 0.2% to $71.43 a barrel.
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