(News Bulletin 247) – The Paris Stock Exchange started the week sharply down, driven by fears of a recession in the United States. The CAC 40 lost 1.42% to 7,148.99 points.

It was a tough day on the global financial markets. Including the Paris Stock Exchange, which was alarmed by the risk of recession looming over the United States after the publication at the end of last week of deteriorating statistics on the manufacturing activity and employment front.

The CAC 40 closed down sharply by 1.42% at 7,148.99 points, falling to its lowest level since mid-November. The leading index managed to limit its decline, after plunging by more than 3% in early trading on Monday morning. However, this is the third consecutive decline for the CAC 40, which has lost more than 5% since the beginning of August.

Elsewhere in Europe, the Dax ended down 1.95% in Frankfurt, the FTSE 100 in London lost 2.2%.

Historic fall in Tokyo

In the United States, the indices remain under pressure at the close of European markets, still shaken by the latest employment report which supports the theory of a recession in the United States. The Dow Jones fell by 2.1% while the S&P 500 fell by 2.4%, which brings its decline to almost 8% compared to its peak of July 16 (5,669.67 points). The index preferred by managers is thus flirting with the correction zone, and it would have to fall to around 5,100 points to tip into this critical zone, warns Bloomberg.

The Nasdaq 100 is at an advanced stage, and is even in a “bear market” (which corresponds to a fall of more than 20% since a recent high). And it is widening its gap a little more, and is losing 2.6% after losing nearly 5%, which is its biggest opening fall in more than four years, Bloomberg also reports.

Earlier in the day, Asian markets had a black day. Including the Tokyo Stock Exchange and its flagship index, the Nikkei, which lost 12.4% on Monday to 31,458.42 points, suffering its biggest drop in a single session. This decline was amplified by the appreciation of the yen, which is not in favor of exporting companies.

This deleterious climate on the markets has fueled the rise of the Vix, the “fear index” which is at 35 points, after having soared by 180% to almost 66 points around 2:30 p.m.

A little glow in the night

In this context, the publication of the ISM services index in the United States was eagerly awaited after the disappointment in the manufacturing component on Thursday. Finally, activity in the services sector in the United States remained expanding in July with an ISM index that stood at 51.4 points compared to 48.8 points in June. This is a small glimmer of hope in the midst of statistics signaling a deterioration in the world’s leading economy.

In this turbulent context, corporate news has been completely relegated to the background. Of the 40 stocks making up the Parisian flagship index, 38 closed in the red, including Teleperformance (-5.4%), STMicroelectronics (-4.1%) and Renault (-3.8%) for the biggest drops.

Among the only two survivors of the day, L’Oréal (+1%) announced the acquisition of a 10% stake in the Swiss pharmaceutical group Galderma for an undisclosed amount.

On the foreign exchange market, the euro is benefiting from the weakening of the dollar and is up another 0.5% at $1.0965. On the oil price side, the October contract on North Sea Brent is down 0.6% at $76.39 per barrel, while the September contract on WTI listed in New York is up 0.7% at $73.02 per barrel.