The Paris Stock Exchange ends higher, its gaze turned towards politics and the Fed

The Paris Stock Exchange ended up 0.76% on Thursday, benefiting from the momentum of the Frankfurt Stock Exchange after the breakup of Olaf Scholz’s coalition, before the next expected monetary policy decision of the American central bank in the evening.

The flagship CAC 40 index gained 55.99 points and stood at 7,425.60 points. It ended down 0.51% on Wednesday.

“The American presidential election still influences the session, but it should be noted that other factors contribute to it, the decisions of central banks” and “the political upheavals in Germany”, comments Amélie Derambure of the asset management company Amundi .

In Germany, the conservative opposition has asked Social Democratic Chancellor Olaf Scholz to submit to a vote of confidence in Parliament at the latest next week, after the breakup of the tripartite coalition in power, made up of the Social Democrats, of the Greens and the Liberals of the FDP.

Cause of the rupture: deep differences on the budgetary and economic policy to follow, the social democrats and ecologists being in favor of reviving the stalled national economy through spending, while the liberals advocate social cuts and a strict budgetary discipline.

“For the Dax”, the flagship index of the Frankfurt Stock Exchange, “the end of the coalition could be one of the best news in months”, commented Konstantin Oldenburger, analyst at CMC Markets. The German counterpart of the CAC 40 jumped 1.70%.

The decision of the American central bank (Fed), particularly awaited, will also be published at 7:00 p.m. GMT (8:00 p.m. Paris time).

“For the moment, estimating the impact of Trump’s policies is extremely difficult. We believe that his election will generate additional inflation and growth”, a factor which could make “the Fed less able to lower its rates ” in 2025 compared to market expectations, said Ms. Derambure.

ArcelorMittal jumps

The world’s second largest steelmaker ArcelorMittal saw its net profit divided by three compared to the same period of 2023, to 287 million dollars (266.6 million euros).

Investors, however, welcomed earnings before tax, interest, depreciation and amortization (Ebitda) at $1.58 billion, above expectations. The title gained 6.49% to 24.63 euros.

Air France-KLM falls heavily

The stock of Air France-KLM plunged 10.50%, to 7.94 euros, after the group published a sharp decline in third-quarter profit and estimated the increase in its tax bill at 280 million euros. euros, if Paris succeeds in its plan to increase air taxes. Since the start of the year, the stock of the Franco-Dutch group has lost more than 41%.

Euronext CAC40

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