The Paris Stock Exchange experienced a slight recovery on Thursday following a sharp decline the previous day, although investor sentiment remains cautious after a strong finish in 2023.

The CAC 40 index saw a gain of 0.52%, recovering 38.77 points to close at 7,450.63 points. In the previous session, it suffered its worst decline since September, dropping by 1.58%. The overall decline for the week remains at 1.23%.

Financial investment advisor Stephane Renou from Milleis Banque attributed the market’s performance to a healthy adjustment following a strong run since November.

Additionally, French 10-year bond yields have rebounded after a two-month plunge, closing at around 2.65% on Thursday.

Mr. Renou observed that investors may have been too quick to predict central bank interest rate cuts in 2024. Although initial rate cuts are anticipated in March, central bankers may wait for the 2% inflation target to be reached, which might not occur until later in the year.

Preliminary data released on Thursday indicated an increase in year-on-year inflation in December to 3.7% in France and Germany.

In the United States, private sector job creation in December surpassed expectations, indicating a healthy labor market. Additionally, weekly jobless claims decreased to 202,000, the lowest in three months.

STMicroelectronics, a semiconductor specialist, experienced a decline of 3.95% on Thursday, along with other European sector stocks. Analysts have expressed caution about these companies due to potential hindrances from geopolitical tensions between the United States and China.

On the other hand, French rail manufacturer Alstom rebounded by 2.42% following an announcement of a major contract in Saudi Arabia. Conversely, a consortium of buyers is expected to hold the majority stake in troubled retail group Casino following its restructuring.