The Paris Stock Exchange fell 0.81% on Wednesday, taking risk aversion in the face of an increasingly plausible global recession scenario.
The star CAC 40 index lost 48.03 points to 5,916.63 points, after losing more than 2% at the start of the session. Monday and Tuesday, it had taken around 0.7%.
“Yesterday’s small technical rebound was not based on much” and the classic cocktail of uncertainties resurfaced on Wednesday, underlines Lionel Melka, director of research at Homa Capital.
“Recession, rate hikes, Jerome Powell’s intervention, inflation, monetary tightening, war in Ukraine, slowdown in the Chinese economy”, he quotes pell-mell, “Basically there is not a lot of good news “.
Jerome Powell, Chairman of the US Federal Reserve (Fed), acknowledged Wednesday before Congress that a rapid rise in interest rates could cause a recession, even if it is not the desired effect.
The last action of the American central bank – a very marked increase in key rates of 0.75 percentage point – had shaken the equity markets last week.
He also admitted that the strength of inflation “obviously surprised” the monetary authorities and he warned that “other surprises” could arise, during a hearing which lasts until Thursday.
Jerome Powell, however, wanted to be reassuring and assured that the American economy is sufficiently “solid and well placed to face a monetary tightening”.
For its part, the Banque de France on Tuesday lowered its forecast for French growth to 2.3% in 2022, against a range between 2.8% and 3.4% published in mid-March, and other economic indicators have been steadily deteriorating for several weeks, showing a slowdown in activity everywhere in the world.
Oil, bond interest rates and risky assets were also down on Wednesday.
The interest rate on the 10-year French loan fell to 2.17%, against 2.33% at the close on Tuesday.
“For the bond market, the Fed will succeed in its mission to reduce inflation but it will act strongly and break growth”, explains Lionel Melka.
The second world steelmaker ArcelorMittal fell 9.56% to 22.43 euros, like the rest of the steel sector, after the confirmation by the Court of Justice of the EU of the refusal of the merger between the Indian steelmakers Tata Steel and German ThyssenKrupp by the European Commission.
“The fact of no longer being able to merge and create synergies is rather bad news for the steelmaking sector”, according to Lionel Melka.
Eramet (-7.10% to 103.40 euros) and Aperam (-3.56% to 30.08 euros) also suffered. Just like oil stocks, with the fall in crude oil prices: TotalEnergies fell 2.88% to 49.05 euros, Maurel & Prom 4.67% to 4.70 euros.
The Carrefour action collapsed by 7.16% to 16.98 euros, after the publication of a note from Bernstein analysts who lowered their recommendation on this title, explaining that the probability of a takeover of the distributor is less probable after the French legislative elections, according to the Bloomberg agency.
OL Groupe falls after its sale
OL Groupe, which represents the Olympique Lyonnais club on the stock market, fell 6.84% to 2.86 euros after two days of suspension of trading due to the announcement of the sale of the club to the man of businessman John Textor.