Paris Stock Exchange closes down after a week of rebound

Paris Stock Exchange closes down after a week of rebound
Paris Stock Exchange closes down after a week of rebound

The Paris Stock Exchange ended down on Friday, but rebounded sharply throughout the week, dominated by the period between the two rounds of the legislative elections. The leading CAC 40 index lost 20.16 points to 7,675.62 points. It spent the first part of the session up, reaching 7,738 points before reversing at the time of the opening of the American markets, closed on Thursday. The closure of the American markets for part of the week reduces the volume traded and makes the trends more precarious.

Over the week, the CAC 40 gained 2.62%, its best performance since mid-May, the last time it set a record points. The performance does not compensate for the heavy losses suffered in June (-6.22%) after the announcement of the dissolution of the National Assembly. Over the year as a whole, the stock market gained 1.76%, much less than its European equivalents.

The atmosphere is a little less tense on the markets than the previous week. The results of the first round of the legislative elections, then the many withdrawals of candidates before the second round, make an absolute majority (289 seats) for the National Rally much less likely. On Friday, three polls give the nationalist party and its allies a relative majority: 200 to 230 seats according to Elabe, 205 to 230 according to OpinionWay, 175 to 205 according to an Ipsos survey carried out on a sample of 10,101 people.

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Data “to end the week well”

The bond market also showed signs of easing, with a reduction in the gap between the interest rate on the French 10-year bond and its German equivalent, the benchmark in Europe. On Friday, the two rates fell together (to 3.21% for the French rate and 2.55% for the German rate), particularly after the American employment report, the most anticipated economic event on the markets.

“This was the data we needed to end the week well” because they show “a scenario of cooling of the labor market”with a rise in unemployment and a slowdown in job creation, underlines Nathalie Benatia, economist at BNP Paribas AM. “The American central bank is accumulating elements to allow rate cuts” in 2024, she estimates, while remaining cautious about the September meeting for the first rate cut, envisaged by investors.

The companies that investors believed were most at risk of suffering the consequences of the application of the National Rally measures, and which suffered the heaviest losses during June, rebounded during the week. This is the case for Société Générale (+8.01% to 23.68 euros), Engie (+7.16% to 14.29 euros) and Vinci (+6.93% to 105.20 euros).

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