(News Bulletin 247) – The Paris Stock Exchange is starting this new week on a timid note, due to the lack of a catalyst to give a firm trend. The CAC 40 closed with a modest increase of 0.1%, this Monday evening, driven by the increases of car manufacturers, Air Liquide, and Airbus.

A session for nothing. The Paris Stock Exchange limited the initiatives taken, with a CAC 40 closing slightly up 0.10% at 7,508.08 points on Monday evening.

Investors took note of the publication of the PMI indices, which measure private sector activity, for the month of September in the euro zone. The composite index, which combines manufacturing and services activity, fell to 48.9 from 51 in August, missing the Reuters consensus of 50.5. Let us recall that a figure of 50 marks the border between a contraction and an expansion of activity.

“The sharp fall in the Eurozone composite PMI suggests that the economy is slowing sharply, that Germany is in recession and that the boost from the Olympics in France has been a flash in the pan,” summarises Capital Economics.

The market will especially await the publication on Friday of the PCE index, the preferred gauge of the American Federal Reserve (Fed), to measure inflation.

Banks and luxury in trouble

On the value side, industry supported the trend. Car manufacturers Stellantis and Renault gained 2.2% and 1.3% respectively. Schneider Electric, Air Liquide and Airbus gained between 1.6% and 1.8%.

The CAC 40, on the other hand, was slowed down by the decline of the banks. Crédit Agricole SA fell by 4.5%, BNP Paribas fell by 3.7% while Société Générale lost 2.8%, undermined by investors’ fears about the economic situation in the euro zone and questions about the future fiscal policy of the new government.

“There is no obvious reason for the banks’ decline on Monday. Perhaps it is a mixture of questions about the taxation of large companies and questions about French debt?”, judges a financial intermediary.

The “spread”, that is to say the yield gap between German and French 10-year debt securities, a gauge of market stress on the French signature, flirted with 80 basis points (0.8 percentage points) during the session. At the close of trading in Paris, however, it had stabilised at around 78 basis points.

Luxury also weighed on the trend. While LVMH finally managed to gain 0.5% at the close, Kering lost another 1.5% while both stocks were downgraded from “buy” to “neutral” by Bank of America.

On the small and mid-cap side, Nicox soared by 48.8% after the announcement of an exclusive agreement with the American Glaukos including a licensing option for an experimental treatment against retinal diseases.

On other markets, the euro is up 0.25% against the dollar at $1.1135. Oil is falling again. The November contract on North Sea Brent is down 0.9% at $73 per barrel, while the same contract on WTI is up 1.30% at $70.11 per barrel.