(News Bulletin 247) – The CAC 40 fell by more than 1% mid-session, while investors were worried about the rise in American bond rates. The market also continues to monitor developments in the Middle East.

The Paris Stock Exchange is suffering this Tuesday. The CAC 40 dropped 1.2% mid-session, to 7,946.75 points, penalized by a mix of fears about inflation, rates and even geopolitics.

The yield on the 10-year US bond continues to rise, rising to 4.653% against 4.608% the day before, while the latest economic data reinforces the prospect of a resilient US economy but also of persistent inflation. And, therefore, key rate cuts from the American Federal Reserve (Fed) which are becoming more distant.

Retail sales published Monday in the United States thus came out higher than expected, following in step with inflation which had already exceeded consensus last week.

While markets had risen significantly since the start of the year and volatility had subsided, “a combination of geopolitical risks, inflation-related uncertainties and concerns about market valuations appears set to bring “test this lull”, notes Marek Haefele, investment director at UBS.

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The vast majority of the CAC 40 in the red

Investors continue to monitor the situation in the Middle East after Iran’s attack on Israel this weekend. Monday evening, the head of Israeli diplomacy, General Herzi Halevi declared that the army would “respond to the launch of so many missiles and drones”, according to comments reported by Agence France Presse (AFP).

Furthermore, China published contrasting economic indicators on Tuesday. Growth in the first quarter, at 5.3% year-on-year, certainly exceeded expectations, but both retail sales and industrial production suffered a significant slowdown.

In terms of values, the entire Parisian market is suffering. Only three CAC 40 stocks are moving very slightly in the green (Orange, Engie and Teleperformance) while the 37 others are in the red.

Cyclical groups are particularly suffering, Stellantis losing 3.3%, Renault dropping 3.15%. The biggest drop was recorded by the ArcelorMittal stock, which was also downgraded to “hold” from “buy” previously by Deutsche Bank.

L’Oréal limits its decline to 0.2% while one of its peers in consumer goods, the owner of Nivea, Beiersdorf takes 2% in Frankfurt, after having signed a very good first quarter.

Note that after abandoning its listing project last fall, the professional software specialist Planisware relaunched its IPO project on Tuesday in “express” mode. The group will arrive at the Paris Stock Exchange on Thursday.

In other markets, the euro is stable against the dollar. Oil is barely moving. The June contract on Brent from the North Sea lost 0.5% to 89.67 dollars per barrel while that of May on WTI listed in New York lost 0.5% to 84.96 dollars per barrel.