(News Bulletin 247) – The Paris Stock Exchange is entering this new week with a decline, after the Hamas terrorist attack against Israel. In this context, oil and defense-related stocks were sought after. The CAC 40 closed down 0.55% Monday evening.
The Paris Stock Exchange has collapsed under the weight of geopolitical tensions. The CAC 40 fell by 0.55%, to 7,021.40 points Monday evening, thus preserving the 7,000 points recovered at the end of last week.
The main news is obviously linked to the situation in Israel where members of Hamas carried out a terrorist attack on Saturday morning. The Hamas assault, the largest in scale in decades, triggered a response in the Gaza Strip and made the market fear a risk of the conflict extending to other countries in the region, including those producing oil…
“The coming days may bring more clarity on how long this conflict will last. But in the short term, we expect higher oil prices and supportive flows into traditional safe havens like the yen and gold “, dissects Mark Haefele of UBS.
Gold rose 1.2% to $1,852.80 per ounce while the yen advanced 0.6% against the euro. Oil, very sensitive to geopolitical risk, especially in the Middle East, is growing. The December contract on North Sea Brent advanced 3.8% to $87.80 per barrel, while that of November on WTI listed in New York gained 4.05% to $86.14 per barrel.
This rise in geopolitical tensions comes at the start of a week marked by the start of third quarter publications on both sides of the Atlantic. In France, the luxury giant LVMH will kick off this fall season, with the publication of its quarterly turnover on Tuesday evening after the markets close. In the United States, the results of the country’s major banks will be on the agenda this weekend, with JPMorgan, Wells Fargo and Citigroup on Friday.
The markets will also be attentive to the publication of price data in the United States, with producer price figures on Wednesday before consumer prices on Thursday. These figures will provide food for thought by the American Federal Reserve regarding the future direction it will give to its interest rates.
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Thales at the top of the CAC 40, Air France-KLM grounded
The rankings have barely changed since mid-session, the shares of oil and oil services groups as well as those of defense have progressed this Monday. With the increase in oil prices, Totalenergies advanced by 1.7%, Vallourec by 4.5% and CGG by 5%.
But it is above all the defense groups which are making the most progress: Thales which increased by 4.7% and Dassault Aviation by 4.4%.
Conversely, airlines fell sharply, penalized by the rise in oil prices, with fuel remaining the main item of expenditure for airlines. Air France-KLM lost 8.5% Monday evening.
On other stocks, Sodexo escaped the decline (+0.3%), supported by a note from Jefferies which sees the growth of the collective catering specialist accelerate and targets an increase of 25% for the stock.
On currencies, the euro lost 0.4% against the dollar at 1.0544 dollars.
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