Renewed optimism regarding Ukraine on the Paris Stock Exchange (+3.08%)

Renewed optimism regarding Ukraine on the Paris Stock Exchange (+3.08%)

The Paris Stock Exchange ended up sharply by 3.08% on Tuesday, betting on an easing of the conflict in Ukraine after progress in negotiations between Moscow and kyiv.

The CAC 40 index was driven by luxury stocks and rose by 203.05 points to 6,792.16 points, a level equivalent to that at which it was evolving before the Russian invasion of Ukraine. On Monday, it had risen by 0.54%.

Talks between Moscow and kyiv on Tuesday in Istanbul were “substantial” and pave the way for a meeting between Presidents Vladimir Putin and Volodymyr Zelensky to end the conflict that began more than a month ago, said negotiators on both sides.

“The market welcomes a possible ceasefire and the positive signals that could lead to a possible diplomatic agreement and therefore to an easing of the conflict”, explains Andrea Tuéni, analyst at Saxo Bank.

A sign that discussions have advanced, Russia will radically reduce its military activity in the direction of kyiv and Cherniguiv in Ukraine, Russian negotiators said on Tuesday.

“We still have to see how the progress of today’s negotiations will materialize,” tempers the Saxo Bank expert.

The prospect of an easing of the conflict was reflected in the oil market, whose two benchmark contracts lost up to more than 5% during the day, also weighed down by confinement in China which is weighing on demand.

The “optimism” of the markets comes despite “galloping inflation, central banks which normalize their monetary policy, a war in Europe”, recalls Andrea Tuéni, who fears a possible “backlash” and monitors the evolution of rates bond interest.

The abnormally narrow spread between US 2-year and 10-year rates points to a risk of high inflation in the short term, coupled with a slowdown in economic growth.

Automobile, banking and luxury acclaimed

Companies with the most exposure to Russia surged.

Starting with Renault, of which Russia is the second market after Europe via the AvtoVAZ group, which took 11.68% to 25.73 euros. Its competitor Stellantis climbed 6.60% to 15.40 euros.

The rest of the automotive sector was celebrating, Faurecia soared 17.25% to 26.58 euros, Valeo 15.75% to 17.93 euros and Plastic Omnium 11.63% to 17.47 euros . The latter announced that it had entered into exclusive negotiations with the Actia group to acquire its Power branch, which specializes in vehicle electrification systems, as well as an entry into the capital of the battery specialist Verkor.

Bank stocks also rose. Societe Generale, which indicated in early March to be exposed to Russia to the tune of 18.6 billion euros, including 15.4 billion for Rosbank, took advantage of this (+8.33% to 26.01 euros). Just like BNP Paribas (+6.40% to 54.34 euros) and Crédit Agricole (+5.57% to 11.34 euros).

Another sector, another leap: the luxury giants LVMH (+5.68% to 671.80 euros), Kering (+2.67% to 599.90 euros), Hermès (+5.53% to 1,307 euros) and L’Oréal (+4.44% to 369.25 euros) pulled the Parisian rating.

Conversely, Thales, whose defense activities have been acclaimed by investors in the context of war, suffered and fell 5.81% to 111.20 euros.

Carmat’s heart drives the action

The action jumped 40% to 13.44 euros, after the announcement of the restart of production of its artificial heart and the confirmation of a resumption of implantations in October.

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