The Paris Stock Exchange opened higher on Friday before quickly sliding into negative territory, with nervousness gaining ground ahead of the first round of legislative elections in France on Sunday, during a session including a salvo of indexes of inflation.
The CAC 40 fell by 0.52%, or by 39.01 points to 7,491.71 points around 9:45 a.m. On Thursday, the flagship index dropped 1.03%, ending at 7,530.72 points.
“This will be an important weekend for the markets, as the first round of the French legislative elections will take place on Sunday. Clearly, we will not know the full results until the second round on July 7, but this will help to get an idea of the possible outcomes,” Deutsche Bank analysts commented in a note.
On Thursday evening, the situation seemed frozen in the polls with the National Rally (far right) largely the favourite with 36% of voting intentions, ahead of the left-wing alliance New Popular Front which gained half a point to 29%, according to the daily Ifop-Fiducial poll for LCI, Le Figaro and Sud Radio.
Under the banner “Together for the Republic”, the Macronist camp is still behind at 21%, while the traditional right (Les Républicains) is relegated to 6.5%.
“Ahead of Sunday’s vote, French assets continued to lose ground, with the Franco-German 10-year spread closing above the 80 basis point mark for the first time since 2012,” they said. added.
At around 07:45 GMT, France’s 10-year borrowing rates continued to rise slightly, to 3.28%, the German rate for the same maturity was at 2.44%. The gap between these two rates is an indicator that measures investor confidence in a country, in this case, France.
On the agenda for the session, the American PCE price index for May is to be published before the opening of the New York Stock Exchange. This is the inflation index most closely followed by the American central bank (Fed). It is expected to be stable over one month, after increasing by 0.3% in April.
Other inflation indices for the month of June also fuel the session on Friday, in France, Italy, Spain and Portugal.
In France, inflation started to fall again in June, to 2.1% over one year, and it slowed in Spain, to 3.4% over one year.
L’Oréal losing momentum
Jefferies analysts believe the global beauty industry slowdown is catching up with French cosmetics giant L’Oréal, according to a note released Friday.
“We understand that the company has revised its market growth forecast downward to 4.5% for fiscal 2024, from 5% and above,” they said.
The title dropped 3.35% to 408.70 euros and recorded the worst performance on the CAC 40.
The Atos saga continues
Onepoint, Atos’ largest shareholder, is to withdraw from the struggling IT giant after backing out of a bid to buy it after its bid was accepted, Atos said in a statement Friday. In addition, Onepoint Chairman David Layani and Helen Lee Bouygues, who also represented the consortium, are resigning “with immediate effect from the board of directors” of Atos.
The title fell 14.64% to 99 cents.
Euronext CAC40
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