(BFM Bourse) – The Paris Stock Exchange is experiencing its biggest drop since July 2023, scalded by renewed fears about the trade policy desired by Donald Trump. The CAC 40 plunged 2.69% this Tuesday evening.
The return of Donald Trump to the White House is blowing hot and cold on the financial markets, and in particular on the European stock markets. On Monday, the Paris Stock Exchange gained 1.2%, invigorated by records on Wall Street.
This Tuesday, the atmosphere clearly deteriorated. Down sharply by more than 1% at midday, the CAC 40 suffered its biggest decline since July 2023 at the close, with a plunge of 2.69% to 7,226.98 points. It even lost nearly 2.8% to 7,217.78 points at the height of the day, around 5:15 p.m.
The Parisian index had not suffered such a drop since July 6, 2023 (-3.12%) and therefore erases its previous largest annual drop of June 14 (-2.66%). , stunned by the dissolution of the National Assembly.
Investors are assessing the repercussions of potential economic measures taken by Donald Trump during his campaign for the highest office. And they are worried about an increase in customs tariffs against European countries and China. Donald Trump plans to increase customs duties from 10% to 20% on all imported products, even from the European Union. This increase in customs duties would even amount to 60% on Chinese imports.
However, according to the Financial Times, Donald Trump could appoint Benjamin Rubio and Mike Waltz to the respective positions of “Secretary of State” (equivalent to the Minister of Foreign Affairs) and “national security advisor” (a senior advisor on national security issues) . However, these two politicians are “hawks” in relation to China, summarizes Deutsche Bank. That is to say, they are known for advocating a tough policy towards China.
“Mr. Trump's emerging team of prominent China opponents signals a clear shift in policy tone for his next term. The administration has hinted at 60 percent tariffs on Chinese imports, a measure which economists say could decimate trade between the world's two largest economies,” notes Spi AM's Stephen Innes.
Luxury in the hard
And luxury, the majority sector on the Paris Stock Exchange, is at the forefront of these fears. “The potential for trade tensions between the United States and China could further weaken Chinese consumer sentiment and complicate China's macroeconomic recovery, which would pose a risk to the sector's recovery,” UBS said this week. last.
Kering dropped 5.8%, LVMH returned 4.5% and Hermès 3.4%.
With an increase of 1%, STMicroelectronics is the only stock to survive this nightmarish day for the flagship Parisian index.
Eiffage closed in balance when Vinci lost 1.5%. Royal Bank of Canada has resumed coverage on both stocks, with guidance at “outperform.”
On other markets, the euro lost 0.6% against the dollar to 1.0597 dollars, the lowest in a year. Oil is rising a bit. The January contract on North Sea Brent rose 0.4% to $72.13 per barrel while the December contract on WTI listed in New York gained 0.5% to $68.37 per barrel.
Sabrina Sadgui – ©2024 BFM Bourse
