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Paris (AFP) – The Paris Stock Exchange ended down 0.82% on Thursday, the euphoria of investors carried by the hope of a more flexible policy of the American central bank having closed on the eve of the monthly employment report in the USA.
The star CAC 40 index fell 49.04 points to 5,963.42 points. This is a second session of decline, after -0.90% on Wednesday, but the index is still up 3.02% over the week.
The Parisian rating attempted a rebound at the opening before falling into the red. The trend was reinforced after new statements from an official of the American central bank (Fed), who affirmed that the institution is still far from putting an end to its restrictive policy.
“It was a transition session” before the monthly report on employment in the United States, which will be published on Friday, commented Stéphane Renou, expert in financial investments for Milleis bank.
The Fed relies in part on the strength of employment to calibrate its monetary policy. A tight labor market in a context of sharply rising prices gives it arguments to tighten its monetary policy in order to bring inflation back under control.
“The current level of inflation justifies that we continue” the increase in the key rate of the Fed, its main tool, because “there is not yet sufficient inflection” on this point, continues Mr. Renou.
He is also skeptical about the rebound at the start of the week, built on “overly anticipated” hopes of a pivot in monetary policy. “We were at the start of a quarter, so there were purchasing phenomena and no doubt also a hunt for bargains”, after the fall at the end of September, he underlines to explain the movement.
On the bond market, the cost of borrowing has increased for States: France’s interest rate when it goes into 10-year debt ended at 2.68%, whereas it had fallen back to 2.37% Tuesday at midday.
Construction suffers
Bouygues hit its lowest level in a year, losing 2.16% to 26.32 euros finally at the close, two days after the completion of its giant acquisition of Equans, bought from Engie, also down sharply on the CAC 40 (-2.29% to 11.95 euros).
The Vinci group also sold 2.56% to 81.56 euros, and the waste treatment specialist Veolia 1.79% to 20.34 euros.
Dynamic transport
Transportation-related businesses held up more than others, rebounding from Wednesday’s performance. Faurecia (+4.37% to 11.94 euros), Air-France-KLM (+2.30% to 1.31 euros), Renault (+0.98% to 29.25 euros).
Degraded Eramet
The action of Eramet (-20.18% to 67.85 euros) suffered heavily from a drop in recommendation passed from “outperform” to “neutral” on the title by Exane BNP Paribas. Since January 1, the title has been in the red (-5.70%). In its wake, ArcelorMittal also fell 4.14% to 20.86 euros.
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