(News Bulletin 247) – The CAC 40 is in sharp decline at mid-session on Monday, while the IFO index measuring the confidence of German entrepreneurs fell in September.

The Paris Stock Exchange begins the week as it ended the last: poorly. At mid-session, the CAC 40 fell 0.6% to 7,138.73 points.

“Markets are still digesting the message from central banks – higher rates for longer – and rising oil prices. US rates remain near the highest in more than 15 years, which they reached after the Fed meeting last week. (…) This weighs on stocks and supports the dollar (the Eurostoxx and the Euro-dollar are at their lowest since March), leading to a tightening of financial conditions”, deciphers Xavier Chapard of LBPAM.

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Kering suffers

European bond yields are also increasing with the German 10-year bond rate rising to 2.789% compared to 2.742% on Friday evening.

Moreover, the Ifo index which measures the confidence of German entrepreneurs deteriorated in September, falling to 85.7 points in September compared to 85.8 the previous month. “The German economy is standing still,” summarizes Clemens Fuest, president of the Ifo institute.

On the value side, the vast majority of the CAC 40 is moving in the red, with in particular Kering dropping 2.8%, penalized by a lowering of recommendation to “underperformance” by Bank of America.

Excluding the CAC 40, Klépierre fell 2.7% while Royal Bank of Canada moved to “underperformance” on the stock.

Valneva gains 0.65% supported by the announcement of a vaccine sales contract with the American army.

On other markets, the euro fell 0.1% against the dollar to 1.0633 dollars. Oil is sluggish. The November North Sea Brent contract fell 0.02% to $91.94 per barrel, while that of the same maturity on WTI listed in New York advanced 0.02% to $90.05.