CAC40: further decline ahead of ECB decision

(CercleFinance.com) - The Paris Bourse continues its decline of the previous day, as it awaits the eagerly-awaited decisions of the European Central Bank (ECB).
The CAC40 index dropped 0.6% to 7474 points.

The Paris market had lost more than 1% to 7522 points on Tuesday, affected - like the rest of the world's stock markets - by ASML's surprise profit warning late in the session.

The Euro STOXX 50 fell 1.8% in the wake of the warning issued by the Dutch manufacturer of equipment for the semiconductor industry, which was itself down 15% at the end of trading.

It has to be said that the company's performance was frankly poor, with order intake only reaching 2.6 billion euros in the third quarter, half of what the consensus was expecting", commented a London-based trader.

French luxury goods giant LVMH's third-quarter results last night added to the gloom, with sales below market forecasts.

In New York, US equity markets were also hit by the ASML effect, with losses ranging from 0.7% to 1% at the close last night.

I continue to see these bouts of weakness as buying opportunities, bearing in mind that all the pullbacks we've seen recently have proved short-lived", stresses the London-based trader.

Investors should, however, be wary of over-committing themselves on the eve of the European Central Bank's (ECB) monetary policy meeting.

The ECB is expected to cut interest rates once again tomorrow, while Germany's difficulties threaten growth throughout the eurozone.

The economic agenda looks relatively light this Wednesday, although retail sales, business inventories and import prices will be the main events to watch during the session.

In the UK, the consumer price index rose by 1.7% over the 12 months to September 2024, an annual rate down 0.5 points on the previous month, according to the Office for National Statistics.

On the bond market, the climate of risk appetite that had prevailed since the start of the week was dampened last night by ASML's 'warning', leading to a return to government bonds.

The yield on the ten-year German Bund eased by four basis points to 2.23% and that on French OATs by eight points to 2.96%, while T-Bonds of the same maturity erased eight basis points below 4.04%.

On the oil market, Brent crude is attempting to rebound by 0.2% after its correction of recent sessions, due to the downward revision of OPEC demand forecasts and Israel's promise to strike only Iranian military positions.

Copyright (c) 2024 CercleFinance.com. All rights reserved.