(News Bulletin 247) – The Paris Stock Exchange ended sharply lower, frightened by renewed tensions in the Middle East as several news agencies reported an imminent ballistic missile attack from Tehran against Israel. The CAC 40 lost 0.8%, back below 7,600 points.

The Paris Stock Exchange begins this month of October as it ended the previous one, that is to say in the red. The CAC 40 lost 0.81% to 7,574.07 points this Tuesday evening, the day after a sharp decline of 2%.

However, the flagship index had regained some color in the middle of the day, reassured by an easing of tensions on the French bond market after inflation figures in the euro zone supporting the thesis of a further reduction in rates from the European Central Bank this month.

New geopolitical tensions

But shortly after 3:30 p.m., the European and American stock indices experienced a fairly sudden downward movement. This return to risk aversion came as several news agencies, such as Bloomberg and AFP, reported that the United States had indications that Iran was preparing to launch “an imminent attack by ballistic missile” against Israel. Both agencies cited an unnamed senior U.S. official. This information revives fears of an escalation of tensions in the Middle East with, as is often the case, fears over oil production.

At the close of European markets, the December contract on Brent from the North Sea advanced by 3.7% to 74.36 dollars per barrel while that of November on WTI listed in New York rebounded by 3.9% to $70.81.

This rise in black gold has penalized airlines whose fuel bill represents one of the main items of expenditure. Air France-KLM fell by 6.7%, while Lufthansa lost 2.5%.

Conversely, defense and oil groups are supported by geopolitical tensions. Thales leads the CAC 40 with an increase of 2.35% at the close, while Totalenergies increased by 1.4%.

Stellantis is struggling to get going again

Apart from geopolitical news, luxury was also in a bad direction. LVMH lost 3.6%, Kering lost 2.9% and Hermès returned 2.7%. The sector may have suffered profit taking after being catapulted last week by announcements from China. In a note published this Tuesday, HSBC judges that the recovery in consumption in the country “will be long”.

Stellantis gained 0.2%, not recovering from its fall the day before (-14.7%) following a heavy profit warning. The manufacturer must now rebuild credibility damaged by recent disappointments.

Excluding CAC 40, Kaufman & Broad jumped 8.4% after nine-month accounts deemed “solid” by TP ICAP Midcap. The developer’s title also benefited from an easing of tensions on the bond market, like Nexity which ended up 4.2%.

Conversely, Lacroix lost 5% after publishing falling half-year results.

On other markets, the euro lost 0.6% against the dollar to 1.1066 dollars.