(News Bulletin 247) – The CAC 40 is down sharply on Tuesday due to a series of disappointing Chinese statistics which weigh in particular on luxury stocks. Day of August 15 obliges, the volumes are also low.

China remains the major concern of the market on Tuesday and the Paris Stock Exchange is suffering. At the mid-session of this day of August 15, a public holiday in France and logically marked by low volumes, the CAC 40 gives up 1.42% to 7244.12 points.

After being weighed down by fears about the financial difficulties of Chinese real estate developer Country Garden Holdings, which suspended trading on several of its bonds on Monday, the market is this time gripped by several disappointing statistics in China.

“We were treated to a fresh round of economic data which once again fell short of expectations. For example, Chinese industrial production in July was up only +3.7% YoY (against +4.3% expected), while retail sales fell to +2.5% (against +4.0% expected)”, develops Deutsche Bank.

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Rise in bond rates

For their part, loans to households fell last month to their lowest level since 2009.

Admittedly, at the same time as the announcement of these flagging indicators, the People’s Bank of China, the country’s central bank, reduced its key rates to support the economy. But that is not enough to reassure investors.

At the same time, bond rates are rising, with the yield on the 10-year US Treasury bond standing at 4.233%, its highest level since the start of the year. “The main driver of higher yields was the prospect that the Fed (the US Federal Reserve, editor’s note) will maintain its restrictive policy longer than expected,” said Deutsche Bank.

Incidentally, the market takes note of the recovery in the morale of German investors, measured by the Zew index, which stood at -12.3 points (the balance between favorable and unfavorable opinions) in August against -14.7 in July. But this indicator largely takes second place.

luxury suffers

With these not very encouraging announcements, the entire CAC 40 is moving into the red. Highly dependent on macroeconomic news, and China in particular, an important land of growth for them, luxury groups are struggling. L’Oréal lost 2.5%, despite an increase in recommendation from Bernstein to “outperformance”. LVMH drops 1.7%, Hermès 1.9%, Kering 1.5%.

Danone fell 1.6% as Bernstein went from “market performance” to “underperformance” on the action.

On other markets, the euro gained 0.25% against the dollar at 1.0934 dollars. Oil prices are falling. The October contract on North Sea Brent fell 0.6% to 85.71 dollars a barrel while the September contract on Wall Street-listed WTI lost 0.8% to 81.83 dollars a barrel.