(News Bulletin 247) – The CAC 40 fell sharply on Monday, weighed down by the poor performance of its luxury heavyweights due to disappointing Chinese statistics and a publication below expectations from the Swiss Richemont.

When luxury sneezes, the entire Paris Stock Exchange catches a cold. Monday’s session illustrates this perfectly: the CAC 40 dropped 1.2% at mid-session, undermined by the decline of its three largest capitalizations: namely LVMH (-4.7%), L’Oréal ( -2.4%) and Hermès (-4.6%).

Two main elements cause these folds. First, Cartier owner Richemont delivered a lackluster release with quarterly revenue falling short of expectations. The Swiss company also plunged 10% on the Zurich Stock Exchange.

Secondly, several statistics in China are disappointing, in particular gross domestic product (GDP), which grew by only 6.4% in the second quarter on an annual basis, far from the 7.4% hoped for by economists, despite a base favorable comparison.

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Defensive stocks resist

“The data is not improving and the rebound effect due to the reopening of the country at the end of last year, does not seem to have lasted very long. After the declines observed in the manufacturing industry and foreign trade, the GDP data released this morning show less growth than expected,” said Vincent Boy, market analyst at IG France.

“Although this could lead to new support from the government, the evolution of the yuan and the situation on the level of indebtedness could reduce the room for maneuver of the party”, he continues.

In this context, the vast majority of the CAC 40 is trending down, even if defensive stocks like Sanofi (+0.8%) or Eurofins (0.5%) are doing well.

On the smallest values, Osmosun suffered profit taking (-19%) on a scale not so surprising for a “small cap”. The title has chained the beautiful increases since its IPO a week ago, still posting an increase of more than 50% compared to its IPO price.

On other markets, the euro continues to rise against the dollar, taking 0.1% to 1.1243 dollars. Oil prices are weighed down by poor Chinese indicators. The September contract on North Sea Brent fell 1.9% to 74.04 dollars a barrel, while the August contract on New York-listed WTI dropped 1.8% to 78.45 dollars a barrel.