The Paris Stock Exchange on the rise, but caution prevails as the legislative elections approach
The Paris Stock Exchange is moving higher on Wednesday, however still remaining cautious against a backdrop of political uncertainties as the first round of the legislative elections in France approaches.
The flagship CAC 40 index advanced 0.50% around 9:45 a.m., gaining 38.03 points to 7,700.33 points. The day before, the index fell by 0.58%, losing 44.59 points to 7,662.30 points.
“While the macroeconomic calendar is quite light this week, the markets are awaiting the elections in France this weekend,” comments Xavier Chapard, strategist at LBP AM.
“Market questions regarding budgetary balances, but also future economic measures, continue to put pressure on French assets,” explains Xavier Chapard.
On the bond market, around 9:45 a.m., the French 10-year rate stood at 3.18%, compared to 3.16% the day before at closing and that of Germany at 2.42%, compared to 2.41%.
This difference – called the “spread” – is an indicator which measures investor confidence in a country, in this case, France. “The rate gap between French and German sovereign bonds has narrowed slightly this week but remains high, around 75 basis points” on Wednesday morning, underlines Xavier Chapard.
Monetary policy is also on the table after “comments from Olli Rehn, member of the Governing Council of the European Central Bank (ECB), who estimated that “two new rate cuts in Europe in 2024 would be + reasonable +”, comments John Plassard, investment specialist for Mirabaud.
Furthermore, the market is awaiting the publication on Friday of the American PCE inflation index, based on consumer spending, the preferred measure of the American central bank (Fed) to judge the evolution of prices.
Finally, the rebound of the technology sector on Wall Street the day before, after several sessions in the red, benefited the market mood.
Nvidia, designer of the processors that drive the large language models of generative AI, returned to the forefront, its stock having jumped 6.76% after having tumbled more than 12% in three sessions and erased more of $400 billion in market capitalization.
Atos, a complicated rescue
The consortium led by the French company Onepoint, chosen for the financial rescue of Atos (-2.96% to 1.16 euros), heavily in debt, has withdrawn its offer, the French IT group, technological pillar of Paris Olympics this summer.
At the same time, Czech billionaire Daniel Kretinsky has renewed his interest in resuming talks.
Euronext CAC40
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