The Paris Stock Exchange, reassured by the ECB, gains 2.03%
The Paris Stock Exchange managed to rebound Thursday after its disastrous session the day before, investors having appreciated the confidence displayed by the European Central Bank and turning in particular to luxury.
The star CAC 40 index regained 140.01 points to 7,025.72 points. The day before, it had experienced its worst session for a year, with a drop of 3.58%.
The results for the week are still largely negative, with a 2.70% decline in the CAC 40.
Attention was still turned to the banks after the setbacks of Credit Suisse on Wednesday. The sector limited breakage in Paris, while remaining behind other values.
Credit Suisse rallied on Thursday helped by the Swiss central bank — which insisted there was no risk of contagion between the difficulties of some banks in the United States and the Swiss financial market — and on the assumption of its redemption.
Main actor of the day, the European Central Bank did not let itself be frightened by the risk of a new banking crisis and decided in favor of a new rate hike of half a percentage point in order to fight the inflation, judging that the banks of the euro zone were solid and “resilient”.
The guardians of the euro are however cautious on the continuation of monetary tightening, anticipating lower inflation for 2023 and 2024 compared to their December view.
The lack of commitment on the path of rates is “a sensible decision, given the immense uncertainty and the situation in the banking sector”, according to Craig Erlam, analyst at Oanda.
On the bond market, rates only rose slightly after their sharp decline for a week. The interest rate for the French 10-year loan ended at 2.82%, while it was well above 3% at the start of the month.
Luxury carries the CAC
Luxury, a sector with a strong valuation and which investors prefer when rates are low, jumped at the end of the session.
Hermès took 4.69% to 1,765.00 euros, even progressing over the week while LVMH gained 3.49% to 801.70 euros and Kering 2.52% to 552.90 euros. In cosmetics, L’Oréal gained 3.38% to 383.70 euros.
This effect also benefited technology stocks: Dassault Systèmes jumped 4.20% to 38.09 euros and Capgemini 2.47% to 169.89 euros.
A little better for banks
The banking sector recovered a little after the heavy losses of the day before, but ended up in disarray. BNP Paribas took over 1.31% to 52.71 euros, Crédit Agricole 0.02% to 10.22 euros, but Societe Generale lost 1.21% to 21.24 euros.