Cac 40 loses more than 1%, fears of growth in China and the eurozone, Market news

The Paris Stock Exchange has fallen sharply in response to stagnant eurozone activity, echoing the downside in China, raising fears of a sharp slowdown. The PMI index, compiled by S&P Global, was 55.5 points in nineteen in April, the lowest level in 15 months, while sales prices rose to a record high.

Mid-session, Bedroom 40 lost 1.50% to 6435.91 points with a business volume of 1.15 billion euros. According to the Nordnet broker, the index briefly “instantly crashed” and fell 3.44% this morning to 6308.47 after the panic that affected the markets of Northern Europe. Contracts future June rose about 0.5% on the US index after the Nasdaq closed its worst month since 2008 on Friday.

Eurozone production activity almost stagnated in April, as production recorded the weakest growth since June 2020. says Chris Williamson, chief economist at S&P Global. He adds that “Respondents not only reported worsening supply tensions exacerbated by the war in Ukraine and new health care restrictions imposed in China, but also highlighted the impact of rising prices and growing uncertainty on economic prospects on demand. “, He adds.

In China, the official PMI of production fell 2.1 points to 47.4, thus below the critical threshold of 50 points separating growth and decline for the second month in a row. Caixin’s industrial PMI also fell 46 points after 48.1 in March.

An eye on Fed rates and balance

Falling stocks and rising bond yields are tightening financial conditions two days before the Fed’s monetary decision, which is expected to boost Fed funds by 50 basis points, the highest since 2000. The Federal Reserve is also expected to announce its intention to reduce its balance sheet. The more aggressive tone adopted by several central bank officials indicates other important gestures to stop the inflationary spiral. According to the FedWatch instrument from the CME Group, the market expects the Fed rate to return to 3% or even higher by the end of the year.

The European Central Bank could also raise the bar. Vice President Luis de Gindos has indeed indicated that the ECB may decide to suspend asset purchases in July pending a future rate hike. This will depend on the central bank’s new economic forecasts, which will be released in June.

Technology and luxury under pressure

In addition to the higher cost of credit, the tightening of monetary policy creates the specter of a recession, especially as price pressures are exacerbated by the growth of raw materials associated with the war in Ukraine. They may also intensify as the European Union is expected to try to agree this week on progressive restrictions on Russian oil imports, which could lead to an embargo by the end of the year, Bloomberg reported, citing sources familiar with the discussion. A barrel of Brent from the North Sea fell 2.3% to $ 104.11. TotalEnergys (-0.9%) and Vallourec (-2.3%).

Cyclical stocks are particularly affected by the deteriorating economic environment. Alstom loses 2.5% Schneider-Electric 2.8% and Perfectly 2%.

Automakers fell 22.6% in new car registrations in France last month as supplies from European manufacturers were hit by the war in Ukraine. Renault lost 1.6% and Stellantis 2.3%. the same for me Fauretia and Valeo which lose 2.2% and 2.5% respectively.

Among the technological reserves, STMicroelectronics decreased by 3.3% and Capgemini 1.8% after the Nasdaq fell more than 4% on Friday.

At other values ​​of growth, Caring loses 2.1%, Hermes 23% and LVMH 1.6%.

Casino flounder 2.4%. Citi has reduced the target price for the title of distributor from 27 to 17 euros.

And vice versa, Crossing an increase of 1.4%. Canadian Alimentation Couche-Tard and the British EG Group are discussing the merger to create a world leader among shops and gas stations, according to Dow Jones, citing sources familiar with the matter.