CAC40: falls back to equilibrium after a strong opening

(CercleFinance.com) - After a strong start to the session, with a gain of over 1% at the opening, the Paris Bourse saw its gains eroded over the course of the session.
At the final gong, the Paris index was content with an anecdotal gain of 0.03%, to 7257 points.

The CAC40 had to contend with a rebound in the luxury goods sector (+5.2% for Kering, +2.7% for Hermès), but also with a decline in Thales (-5.1%), the stock still being penalized by an investigation into possible bribes by the Serious Fraud Office (SFO), the British fraud control agency.

Across the Atlantic, the S&P500 gained 0.4% behind the Nasdaq (+0.6%) and the Dow Jones (+0.8%).

On the bond front, we note the sudden easing in US yields, down 11.5 points to 4.3%. In Europe, it's a more timid affair, with Bunds at 2.2040% down by -5pts and our OATs at 3.015% down by -3.8pts.

The yield differential to the detriment of the dollar has enabled the euro to recover by +0.7% to $1.048, after testing $1.034 on Friday.

Although market participants reacted little to the recent upsurge in tensions linked to the Ukrainian conflict, they remain on the lookout for any new developments concerning the health of the Old Continent's economy.

In this context, they will be paying close attention on Friday to the latest eurozone inflation figures for November, which should confirm that a return to the ECB's 2% target is imminent.

"The ECB will have no choice but to adopt a more accommodating stance in the face of the economic challenges facing the zone, which will normalize cyclical inflation", believes Alexandre Hezez, strategist at Richelieu Group.

More aggressive rate cuts than expected could lead to a further weakening of the euro, already back to two-year lows against the dollar last week, and at the same time restore some color to European export stocks.

Germany's Ifo business climate index, which was released this morning, confirms the difficult times currently facing Europe's leading economy, a factor which is also behind the underperformance of European equities.

After rebounding in October after four consecutive months of decline, the business climate index fell again in the month just ended to 85.7, compared with 86.5 last month. Economists were forecasting a figure of around 86.

In French company news, TotalEnergies and Air Liquide are launching a renewable hydrogen production project on the La Mède platform (Bouches-du-Rhône).

TotalEnergies has also learned of the indictment of certain executives of the Adani group in connection with alleged corruption relating to the activities of Adani Green Energy Limited (AGEL). The indictment does not target AGEL itself, nor any company linked to AGEL.

'TotalEnergies, which is neither targeted nor implicated in the facts described by this indictment, will take all necessary measures to protect its interests as a minority shareholder (19.75%) in AGEL and as a partner (50%) in joint ventures with AGEL' states the group.

Finally, Atos announces that it has received a non-binding offer from the French State for the potential acquisition of 100% of the Advanced Computing activities of its BDS division. This acquisition has an enterprise value of 500 million euros, which could potentially be increased to 625 million euros including earn-outs.

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