(BFM Bourse) – The Parisian market – and the other main stock exchanges – continue their fall and significantly increase their losses on Wednesday, fearing the power of the second wave of Covid-19 and its economic repercussions.
Even if it avoided the worst at the end of the session, the CAC 40 accumulated heavy losses at the start of the week. After dropping 1.9% on Monday, then 1.77% on Tuesday, the main sample of the Parisian odds sinks and loses an additional 3.37% on Wednesday – after having nevertheless given up to 4.4% an hour before the close at .4,571.12 points, the lowest since the end of May.
President Emmanuel Macron could announce Wednesday evening a general reconfinement in France to try to slow down the second wave of Covid-19, while more than 500,000 new cases were identified across the world on Tuesday, which constitutes a record. Same situation across the Rhine, where the German Federal State and the Länder agreed on Wednesday on the establishment of a partial re-containment from November 2 to 30 which will include the closure of bars and restaurants, according to reports. sources close to the discussions. These new restrictions are weighing on investor morale and greatly threatening an already fragile economic recovery.
More than Paris and Frankfurt (-3.9% for Dax), it is all of the major global stock markets that now fear the scale and violence of the second wave of Covid. On Wall Street, the indices plunged from the opening and dropped between 2.6% (Dow and S&P) and 2.8% (Nasdaq) at 5.35 pm, while the “Footsie” also lost 2.8% in London . It should be noted that across the Atlantic, the uncertainty linked to the presidential elections and the absence of a stimulus plan add to fears about the pandemic and offer no support to operators.
While the health situation continues to deteriorate at high speed, investors have already feared in recent days that governments, especially European governments, operate a new turn of the screw, and the markets have only accelerated their losses, already substantial , of the first two sessions of the week. The flagship index of the Parisian rating thus showed its worst session since that of September 21 (-3.7%, already under the effect of health fears), and brings its losses to 6.9% since the close of last Friday.
The fear of a new confinement also capsizes oil prices, which have fallen back to a low since early November. The price of a barrel of Brent falls back under 40 dollars, to 39.45 dollars (-5.19% compared to the day before) when that of “light sweet crude” Texan loose 6.01% to 37.19 dollars.
Few stocks float on the Parisian coast on Wednesday morning. Within the flagship index, only Teleperformance ended the session in the green, with a meager gain of 0.5% in the wake of the announcement of an agreement reached “for the acquisition” of Health Advocate, an American health services company, for $ 690 million. And among the 120 stocks in the extended index, SES (+ 0.4%), bioMérieux (+ 0.3%) and Neoen (+ 0.1%) are the only ones to end the session in positive territory, which says a lot about the purge. Even very good publications like that of Maisons du Monde (-1.3%) did not find favor in the eyes of operators.
Some news to report all the same concerning the values of the main sample. LVMH would be close to an agreement with Tiffany and LVMH (-4%) on the reduction of the price that the French luxury giant would pay to get its hands on the American jeweler and bring it down to 131.50 dollars per share, against 135 dollars in the initial offer, according to sources familiar with the matter. French automaker PSA (-4.5%) weathered the fall in the automotive market in the third quarter, with revenue down 0.8% to € 15.5 billion, and announced on Wednesday maintain its objectives for fiscal year 2020. Finally, Carrefour reported its best quarterly performance for at least 20 years, driven by its recovery in France and Spain as well as by very dynamic activity in Brazil. with revenues up 8.4% when the consensus was for an increase of 5.3%. The title of the distributor ends up close to equilibrium (-0.1%).
On the other side of the list, the movements are much more violent, as evidenced by the fall of Sopra Steria (-12.9%) which revealed a more marked contraction than expected in its revenues in the third quarter. In the main sample, the largest drops are for Renault (-8%), Atos (-7.6%), URW (-6.5%), BNP Paribas (-5.2%), Société Générale ( -4.7%) or Danone, Capgemini, EssilorLuxxotica, STMicro and Publicis (-4.5% each). On the SBF 120, Fnac Darty (-12.9%), Alten (-9.4%) and Eramet (_8.8%) are showing heavy losses.
Finally, on Forex, the dollar still benefits from its status as a safe haven and the single currency gives up 0.25% to 1.1750 dollars around 6:20 p.m.
Quentin Soubranne – ©2020 BFM Bourse
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