(BFM Bourse) – The Paris index is losing ground while the Moody's agency lowered France's rating by one notch on Saturday. Investors are awaiting the meeting of the Federal Reserve (Fed), the outcome of which will take place on Wednesday.
The Paris Stock Exchange begins the week on a bad note. The CAC 40 dropped 0.75% to 7,353.70 points at mid-session this Monday.
All European markets are in the red. But the CAC 40 underperformed a little to the extent that the DAX 40 in Frankfurt lost 0.3% at the same time and the FTSE 100 in London lost 0.34%.
Investors are taking into account the downgrading of France's credit rating by Moody's which occurred overnight from Friday to Saturday. The agency lowered this rating to “Aa3”, against “Aa2” previously, with a stable outlook. The agency notably invoked the “political fragmentation” which should prevent the improvement of public finances, to justify its choice.
>> Access our exclusive graphic analyses, and gain insight into the Trading Portfolio
Vivendi at the center of the news
After this decision, the gap in the yield of France's 10-year debt security with that of Germany of the same maturity, a thermometer of market stress on the French signature, widens a little. This gap stands at 79.5 points (0.795 percentage points) compared to 76.7 points on Friday.
“The Christmas rally (a bullish phase on the stock markets, editor's note) is moving away a little further following the downgrading of the French rating by the Moody's agency to Aa3 last Friday. In normal times, such a decision, even when it occurs outside of the calendar, it has a fairly limited effect. But the context is unfavorable,” explains Christopher Dembik, investment strategy advisor at Pictet AM.
“At this stage, we believe that the interest rate gap between France and Germany should remain high, close to the current level, so for a 10-year maturity the rate should remain between 75-80 basis points “, writes Sebastian Paris Horvitz of LBPAM.
Investors are also awaiting the meeting of the American Federal Reserve (Fed) on Tuesday and Wednesday. A rate cut of a quarter of a percentage point is widely expected by the market.
On the value side, 37 CAC 40 stocks are moving in the red, with only Essilorluxottica (+0.5%) Safran (+0.33%) and especially Vivendi (+37%) swimming in the green.
Vivendi split into four companies on Monday, with the listing of Canal+ in London, Havas in Amsterdam, and Louis Hachette Group on Euronext Growth. If Canal+ suffers, losing 16% for its first steps on the London market, Havas takes 1% in Amsterdam and Louis Hachette Group jumps 27%.
On other markets, the euro lost 0.2% against the dollar to 1.0486 dollars. Oil is sluggish. The February contract on North Sea Brent lost 0.8% to $73.87 per barrel while the January contract on WTI listed in New York lost 1% to $70.57 per barrel.
Julien Marion – ©2024 BFM Bourse
