(BFM Bourse) – The Paris Stock Exchange is back in bright colors, after the ECB’s decision to lower rates once again, and the announcement of statistics favorable to consumption in the United States. The CAC 40 rebounded by 1.22%, to return to contact with 7,600 points.
The appetite for risk returned this Thursday to the Paris Stock Exchange. The CAC 40 rebounded by 1.22% to 7,583.73 points this Thursday, supported by further monetary easing decided this Thursday by the European Central Bank (ECB).
As expected, the ECB announced in the afternoon a new rate cut of 0.25 percentage points. This is the third reduction in its key rates this year, after that decided in June, followed by another in September. It is justified by the slowdown in inflation in the euro zone.
Reassuring retail sales
Its president, Christine Lagarde, also indicated that the growth prospects in the euro zone were “on a downward trend”. “At this stage, the scenario of a soft landing for growth is not called into question and the disinflation process seems sufficiently well anchored to authorize a gradual exit from the restrictive nature of monetary policy,” argues Alexandre Perricard, general director and head of rate management at Uzès Gestion.
The basic assumption “remains that the ECB will make a further rate cut of 25 basis points (0.25 percentage points) at its December meeting, followed by further similar reductions at each meeting in early 2025,” says Michael Brown analyst at Pepperstone
Even if, “the ECB remains faithful to its data-dependent approach and gives no indication of further declines,” recalls Nicolas Forest, head of investments at Candriam.
On Wall Street, a feeling of euphoria is also winning over investors, after the publication of reassuring statistics on American consumption. Retail sales for September increased by 0.4% over one month, which is higher than expectations (+0.3%). Note that the Philly Fed index which measures manufacturing activity in the Philadelphia region increased to 10.3 in October from 1.7 in September.
Airbus at the top of the CAC 40
On the value side, Airbus gained 3.9%. The aircraft manufacturer published pre-results information for the third quarter on Wednesday evening, which did not lead to a lowering of the outlook, as feared by some market players.
Publicis rebounded 2.8% after posting better-than-expected growth in the third quarter and raising its revenue growth target for 2024.
Pernod Ricard advanced 1.8%, despite a disappointing first quarter in terms of activity.
Outside the CAC 40, Sartorius Stedim Biotech rebounded by 17.7%. Although the nine-month results themselves are relatively disappointing, order intake has increased, thus reassuring the market.
On other markets, the euro fell by 0.25% against the dollar to 1.0861 dollars after the ECB’s decision on its rates. Oil limits its gains despite a surprise drop in oil stocks in the United States last week. The December contract on North Sea Brent gained 0.1% to $74.27 per barrel while the November contract on WTI listed in New York gained 0.2% to $70.53 per barrel. Note that gold set a new record at $2,688.83 per ounce, supported by the prospects of future rate cuts.
Sabrina Sadgui – ©2024 BFM Bourse
