(News Bulletin 247) – The Paris Stock Exchange progressed at mid-session, supported by luxury heavyweights while support measures from the Chinese government would be imminent, according to the local press.

The Paris Stock Exchange continues its difficult and slow recovery, after having suffered last week. The CAC 40 thus advances by 0.9% to 7208.51 points this Tuesday at mid-session.

The main support point for the market on Tuesday comes from China. The People’s Bank of China, the country’s central bank, and the NFRA, the financial regulator, have asked financial institutions to extend by one year their aid scheme for borrowing from the real estate sector, a key industry in China’s growth that has become from his Achilles heel.

“Furthermore, there have been signals for increased support, the China Securities Journal indicating that China should “accelerate” the deployment of the policy to support the real estate market and that measures aimed at supporting business confidence could be introduced”, underlines Deutsche Bank.

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US inflation in sight

“If indeed there was this ‘package’ (of additional measures, editor’s note) this would make it possible to maintain Chinese growth and perhaps to give a new cyclical impetus at the global level”, explained on BFM Patrimoine Sara Thirion, equity strategist at TP ICAP Europe.

The latest indicators are hardly engaging. The Zew index, which measures German investor confidence, fell in July to -14.7 (the balance between positive and negative opinions), while the FactSet consensus was -10. Inflation for the month of June was confirmed at 6.4% over one year by the German statistics institute Destatis.

The market is preparing above all to analyze on Wednesday the inflation figures in the United States for the month of June, expected at 3.1% over one year, and at 5% for the “core” index (excluding food prices and energy) by economists surveyed by the Wall Street Journal.

Luxury is doing well

As for values, the potential stimulus measures for the real estate sector and the economy in China are carrying luxury stocks, Hermès taking 2% and LVMH 1.8%.

Thales wins 1.7% and Dassault Aviation 1.8%, benefiting from press information on an order for 26 Rafales from India which could be formalized in the days to come, during the visit to France of the Indian Prime Minister Narendra Modi. Dassault Aviation manufactures the fighter plane while the electronic equipment supplied by Thales represents between 20% and 25% of the value of the aircraft.

On the smallest caps, the reconditioning specialist Largo jumped 27.5%, driven by an initiation of cover on the purchase by TP ICAP Midcap.

On the other markets, the euro gained 0.1% against the dollar at 1.1011 dollar. Oil contracts are moving up slightly. The September North Sea Brent contract advanced 0.15% to 77.81 dollars a barrel while the August contract on New York-listed WTI rose 0.19% to 73.13 dollars a barrel.