(News Bulletin 247) – The Paris Stock Exchange still remains poorly oriented, weighed down by the surge in bond rates. The CAC 40 lost 0.75% at midday on Tuesday.
The Paris Stock Exchange is powerless in the face of the steamroller of high bond rates. The CAC 40 lost another 0.75% to 7070.35 points this Tuesday at midday, the lowest since the beginning of July.
On Monday, the flagship Parisian index returned 0.85%, penalized among other things by the decline in the luxury sector due to tensions on the bond market and the situation in China.
The bond market concentrates the concerns of investors, always under tension in reaction to the firmness displayed by central bankers on their monetary policy. At the end of last week, the American Federal Reserve expressed its desire to maintain its rates at high levels.
“If the Fed considers that it no longer needs to act urgently and can, according to its macroeconomic forecasts, allow itself time for an additional pause in order to better understand the consequences of the current tightening, the dot plots, however, indicate a more precise positioning hawkish (restrictive) than at the June meeting”, deciphers Thomas Giudici, head of bond management at Auris Gestion.
Luxury still struggling
The real estate crisis in China adds uncertainty to this already precarious climate on the financial markets. The colossus Evergrande fell again on the stock market after one of its subsidiaries, Hendga Real Estate Group, defaulted on a bond repayment.
These difficulties in China are putting a strain on the luxury sector on the Paris Stock Exchange. Because it is a sign that China, one of the world’s leading luxury markets, is still experiencing economic difficulties. Kering lost 2.4%, LVMH lost 1.7% and Hermès -1.1%.
Tech companies, sensitive to changes in rates, are also suffering the blow. Red lantern of the CAC 40, Worldline lost more than 5%, while Capgemini returned 1.7%.
Excluding the flagship index, Carmat collapsed by another 25% after indicating that it could run out of liquidity by the end of October.
On other markets, the euro gained 0.1% against the dollar to 1.0601 dollars. Oil continues to decline. The November North Sea Brent contract lost 0.8% to $91.11 per barrel, while that of the same maturity on WTI listed in New York lost 0.9% to $88.88.
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