(News Bulletin 247) – The CAC 40 fell sharply in mid-session on Wednesday as the repercussions of the rise in oil prices worried the market.
The Paris Stock Exchange is on track to post a sixth consecutive session of decline. The CAC 40 is currently down 0.7% to 7202.39 points at the start of the afternoon on Wednesday.
The market has been worried since oil prices were supported on Tuesday by the announcement of Saudi Arabia which decided to maintain its production cuts for three months. This briefly allowed the North Sea Brent contract to return to 90 dollars a barrel.
Because of this decision “investors are becoming worried about inflation expectations,” said Stephen Innes of Spi Asset Management.
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A headache for central banks?
“Therefore, even if investors betting on a rise in oil dance in the streets, the significant price rise could prove difficult for central banks and financial markets, which were embellishing the current groove of lower inflation. “, he adds.
“For central banks, rising oil prices are complicating the picture, although as it stands we still think the Fed and the ECB (US Federal Reserve and European Central Bank) should give each other time and maintain their rates unchanged by the end of the year”, judge Xavier Chapard of LBPAM.
These concerns are reflected in the rise in bond yields. The rate of the 10-year bond from the United States rose to 4.259% on Tuesday evening against 4.17% on Friday (Wall Street was closed on Monday).
As for values, car manufacturers are well oriented, Renault taking 1.8% and Stellantis 0.8% while Exane BNP Paribas has raised its price targets on the two values.
On the side of the smallest values, the manufacturer of boxes for electronics Egide takes 8% after having completed a capital increase which should allow it to restore its finances.
On other markets, the euro rose against the dollar by 0.2% to 1.0743 dollars. The November North Sea Brent contract fell 0.6% to $89.57 a barrel while the October New York-listed WTI contract fell 0.4% to $86.35 a barrel.
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