The Paris Stock Exchange saw a 0.52% gain on Thursday following a steep decline the day before, although investor sentiment remains cautious despite a strong finish to 2023.
The CAC 40 index rose by 38.77 points to end at 7,450.63 points. This rebound followed its worst session since September, resulting in a 1.58% loss the day prior. The index has seen a 1.23% decline for the week.
According to Stephane Renou, a financial investment advisor at Milleis Banque, the market’s strong performance since November 1 has been followed by a period of correction, which is now occurring. The French 10-year bond yield has mirrored this movement, falling from a peak of 3.60% to a low around 2.40%, then rising to 2.65% on Thursday.
Renou stated that investors may have acted too prematurely with expectations of central bank interest rate cuts in 2024. While many analysts anticipate interest rate cuts in March, central bankers might wait until the inflation target of 2% is achieved, which may occur later in the year.
Inflation numbers for December revealed a year-on-year rise of 3.7% in France and Germany based on preliminary data released Thursday.
In the US, private sector job creation in December exceeded analysts’ expectations at 164,000, signaling a dynamic labor market that could potentially contribute to inflationary pressures. Even with the positive employment figures, weekly jobless claims fell by 18,000 to 202,000, reaching a three-month low.
Semiconductor specialist STMicroelectronics experienced a decline of 3.95% to 41.34 euros on Thursday, in line with the performance of other European sector stocks. This week, the stock has fallen by 8.63%, making it the worst-performing stock on the CAC 40 index. Soitec on the SBF 120 lost 7.85% at 149.10 euros.
French rail manufacturer Alstom saw a share price rebound of 2.42% to 11.23 euros after announcing the signing of a contract worth over 500 million euros for the construction of a tramway in Al-Ula, a city in northwestern Saudi Arabia.
Struggling retail group, Casino, suffered a 12.65% decline to 0.65 euro as a consortium of buyers is expected to hold 53.7% of the company’s capital after its restructuring, an outcome deemed “fair” by an independent expert.
