(News Bulletin 247) – The CAC 40 is falling sharply at mid-session. Chinese growth slowed down significantly last year. Furthermore, the President of the ECB declared that the market’s optimistic expectations of rate cuts were not helping to combat inflation.

Tough session for the CAC 40 this Wednesday. The Parisian index dropped 1.2% to 7,306.50 points at mid-session, weighed down by Chinese growth and the market’s growing doubts about future rate cuts from the major central banks.

China announced this Wednesday morning that economic growth reached 5.2% last year, exceeding the government’s target of 5%, falling to its lowest level since 1990.

“On a quarterly basis, the economy grew by +1.0% (vs. +1.1% expected) in the fourth quarter, representing a slowdown from the revised pace of +1.5% in the previous quarter” , however, points out Jim Reid of Deutsche Bank.

“The outlook for 2024 remains uncertain, with the world’s second-largest economy still facing the current real estate crisis, deflationary pressures and low consumer and business confidence,” adds the establishment.

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In addition, the bond market remains tense. Yields on 10-year sovereign debt are contracting in the euro zone, with that of the German bond moving to 2.828% compared to 2.260% on Tuesday evening.

Speaking to Bloomberg from the Davos economic forum, Christine Lagarde, the president of the European Central Bank (ECB), blew hot and cold a bit this Wednesday. Although she considered a rate cut by the summer “likely”, the central banker also warned that the market’s optimistic expectations of key rate reductions were not helping the ECB fight inflation.

“We believe that there are downside risks in the short term, as the markets may consider that there are too many reductions (rates, editor’s note) too soon,” HSBC’s Europe strategists warned in a note this Wednesday.

On the value side, OVHcloud gained 6.3% while the group delivered its medium-term targets during an investors day.

Worldline lost 1% while the payments group was considering, according to Reuters, developing a strategy to reassure its shareholders and avoid any hostile takeover.

Esker drops 2.6% after delivering its order intake and its turnover for the whole of 2023.

On other markets, the euro is almost stable against the dollar, at 1.0878 dollars. Oil is weighed down by weak Chinese growth. The March North Sea Brent contract lost 1.8% to $76.86 per barrel, while the February contract lost 2% to $70.97 per barrel.