(News Bulletin 247) – The Paris Stock Exchange lost ground with a CAC 40 which lost 0.6% on Tuesday evening. Risk aversion is back on the heels of concerns over China’s domestic demand as several countries release their inflation figures on Wednesday.

Recession fears are reminiscent of the markets following poor foreign trade figures in China. The world’s second-largest economy is showing signs of weakness as China’s exports rose 8.5% year on year last month, down from March’s 14.8% growth, while imports fell 8.5% year-on-year. 7.9%, more than in March (-1.4%) and much more than the consensus of economists polled by Bloomberg (-0.2%).

In response to these harbingers of economic slowdown, the CAC 40 therefore gives in to gloom and loses 0.59% to 7397.17 points on Tuesday evening after losing 1.10% shortly before 2:00 p.m. Monday, the Paris star index had gleaned 0.1% after a session without relief, the operators being absent subscribers taking advantage of a holiday to recharge their batteries.

This contraction in Chinese domestic demand is therefore tensing up the markets, which were already very feverish before the publication on Wednesday afternoon of the main statistics of the week, namely American inflation for the month of April. Economists surveyed by the wall street journal expect an increase of 5% over one year for the overall figure and 5.6% for the basic index, excluding energy and food prices.

The uncertainty hovering over the US debt ceiling is also likely to weigh on demand. Time is running out because this ceiling could be reached in early June if no agreement is reached between Democrats and Republicans in Congress. US President Joe Biden will meet with representatives of the Democratic and Republican parties in the House of Representatives and the Senate with a view to finding a compromise and avoiding the payment default of the world’s largest economy.

“The realization of such an assumption would obviously be a shock for the American bond markets”, notes Antoine Fraysse-Soulier, head of market analysis at eToro.

Quoted by AFP, the analysis company Oxford Economics reports in a note that investors “shun the US debt maturing in June, July and August”.

Luxury in difficulty, biotechs are popular

Luxury stocks are the most affected by this contraction in Chinese demand. The heavyweights of the Parisian dimension Kering and Hermès fell respectively by 2.7% and 1.1% while LVMH resists better (-0.5%),

Up for a good part of the session, Euroapi finally lost 0.2% despite the announcement of a contract with a subsidiary of L’Oréal for several projects in cosmetics

On the side of more modest capitalisations, the biopharmaceutical company Theranexus soared by 75.5% after obtaining validation from the American health authority of the efficacy criteria and design of its pivotal phase III clinical study (the last stage of the clinical trials before possible commercialization) for its potential treatment against Batten disease.

For its part, Erytech Pharma limited its lead to 8.8%, after gaining 40% in session. The Lyon-based company has a cash position offering it financial visibility until the second half of the 2024 financial year.

On other markets, the euro lost 0.45% to 1.0957 dollars before the inflation figures in the United States. Oil prices mark a pause on Tuesday, caution being in order after the publication of a degraded statistic on the trade balance in China. The North Sea Brent contract for July delivery fell 2% to $75.49 a barrel while the June contract on New York-listed WTI fell 1.9% to $71.80 a barrel.