BUSINESS

Covid weighs down the Paris Stock Exchange, indifferent to Macron’s re-election – 25/04/2022 18:50

The control room of Euronext, the company that manages the Paris Stock Exchange (AFP / ERIC PIERMONT)

The control room of Euronext, the company that manages the Paris Stock Exchange (AFP / ERIC PIERMONT)

The Paris Stock Exchange closed on Monday down 2.01%, expressing concern over the Fed’s aggressive stance and the health situation in China that threatens growth, but indifferent to the upheavals in French politics in the aftermath of Emmanuel Macron’s re-election. .

The CAC 40 stellar index fell 132.04 points to 6,449.38 points. As early as Friday, the stock market had lost nearly 2%, particularly worried about the statements of the head of the Federal Reserve (Fed) Jerome Powell.

On Thursday he indicated that a Fed’s key rate hike of half a percentage point “was on the table” for the next monetary meeting in early May, in order to fight inflation more vigorously.

“The rise in rates in a context of slowing growth may start to worry the markets,” Yohan Salleron, equity manager of Mandarine Gestion, told AFP, for whom “the cyclical part of the rating”, whose changes are mostly related to economic activity, it “suffers a little”.

According to the manager, “Covid, especially in China”, is also responsible for the malaise, because “it is starting to weigh a little on growth prospects”.

Almost all 25 million inhabitants of the economic capital Shanghai have been confined since the beginning of April, disrupting the country’s supply chains and all economic activity. And the threat of containment, after a rare epidemic, now threatens Beijing.

The re-election of Emmanuel Macron on Sunday as President of the Republic, however, left the stock exchange indifferent.

“The latest polls had made it possible to anticipate this re-election”, explains Salleron, so much so that some French stocks “very linked to Macron’s re-election” such as banking, “benefited from it at the end of last week”.

Therefore, on Monday “there is no particular bonus for re-election,” he analyzed.

Luxury and mining weighed down by China

The luxury sector, heavily dependent on the Chinese market, took a hit on Monday. Kering lost 4.35% to 506.20 euros, Hermès 3.91% to 1,179.00 euros and LVMH 3.75% to 615.60 euros.

A “warning signal” about the “potential impacts of the closure in China” had already intervened on Friday according to Yohan Salleron, with the decline of more than 5% of the stock of Kering, weighed down by its Gucci brand.

Shares of mining companies also toasted, investors are expecting disruptions to production lines and a drop in demand for raw materials caused by the economic slowdown in China. ArcelorMittal fell by 8.84% to € 26.92, TotalEnergies by 4.01% to € 44.03 and Aperam by 5.85% to € 35.43.

Euronext CAC40

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