CAC 40: At the end of another crazy session, the CAC 40 limits its drop to -1.3%

(BFM Bourse) – Author of a spectacular “intraday” rise, the CAC 40 ends the first – particularly turbulent – session of the week with a decline of 1.31%, after staggering by almost 5% in the morning and then increased slightly in the afternoon. Still, the index fails to maintain the 6,000-point threshold, below which it had not fallen since March 29, 2021.

The war in Ukraine is attracting the attention of all stakeholders and is causing a remarkable increase in volatility in global markets. While some commodity markets (energy, wheat, nickel, etc.) are gripped by speculative frenzy, panic is gripping stock markets, as evidenced by the unlikely ‘intraday’ variations of recent sessions. Nearly 360 points separate the lowest hit on Monday at around 9:30 a.m. (5,756 points) from the high reached at the opening of US markets, around 3:30 p.m., at 6,115 points. That’s a variation of more than 5.7% between the two for the CAC 40, a magnitude not seen since the March 2020 crash.

After the chaotic opening and then impressive rally, the tricolor market barometer fell again more than 2% from the peak of the day during the last two hours of trading, to end the session 1.31% to 5,982.27 points , in a trading volume that is still extremely high at more than 8 billion euros. Between caution and fear, investors are still trying to gauge in real time the evolution of the Russian-Ukrainian conflict and the economic impact of Western sanctions, particularly on the oil market. Market behavior “is determined by the constant flow of information related to the Russian invasion” of Ukraine, notes Oanda analyst Craig Erlam.

Baffled by the weekend’s announcements and the possibility of a Western embargo on Russian oil, the Paris market fell into bear market territory Monday morning, falling more than 20% since its last peak. , registered in early January at nearly 7400 points.

On the twelfth day of a war that has already claimed thousands of lives on both sides, the head of US diplomacy, Antony Blinken, floated the possibility of banning Russian oil imports, cutting nearly 20% of the key global crude benchmarks. oil in the Asian trade broke out. , at levels uncharted since 2008. Brent and WTI have since wiped out much of their initial gains, but the former still posted a 4.4% rise to $123.3 at around 6pm.

“Russia’s invasion of Ukraine has increased the distribution probability of stock market performance. The increased uncertainty stems from a range of factors, including but not limited to: President Putin’s intentions, the extent of future sanctions, the fate of weapons, defense policy of non-NATO states, China’s perceived position, commodity prices, global growth, inflation and central bank policies.” , notes the UBS strategy team.

“As a result, we are now less confident in the possibility of any given scenario becoming a reality and the range of potential developments is also broader – both upwards and downwards. While our central scenario remains an improvement in equity markets towards the end of the year, to this day, a less clear-cut risk/reward tradeoff involves changing our tactical positioning on equities from favored asset class to neutral,” the bank explains.

Thales, Dassault Systèmes and TotalEnergies are floating

Schematically, only two sectors find favor with investors: on the one hand, defense (up an additional 6.6% for Thales, which has risen almost 50% since the beginning of the year) and on the other hand, commodity producers commodities, especially in energy and metals. Inhibited by the threat of in turn having to draw a line from its assets in Russia, TotalEnergies is still at 0.8%. Oil services benefit much more fairly at 13.4% for Schlumberger, 7.4% for Vallourec or 9.8% for CGG. Eramet (+12.4%) and Maurel and Prom (+12.3%) also benefited from the rise in metals and oil prices, respectively. Dassault Systèmes has been particularly resilient since the start of the armed conflict (+1.8% over a month), but is also progressing at 3%.

Conversely, the Way of the Cross continues for Engie (-5.9%), Alstom (-5.3%), Renault (-5.3%) or Société Générale (-4.2%). Crédit Agricole lost 2.4%, while the bank estimated its exposure to Russia and Ukraine at 0.6% of its commercial liabilities. Danone will “provisionally” maintain its production and distribution of fresh dairy products and infant nutrition in Russia to meet the basic food needs of the civilian population, but suspend all new investment in the country. The title is down another 2.3%. URW posted the biggest drop of the day with another plunge of 8.8% (-7.6% on Friday), for Stellantis (-6.4%, again after falling 7.6% on Friday).

The flight to the dollar continues in the foreign exchange market, the euro loses another 0.59% to $1.0870, the lowest level since the summer of 2020. In the crypto asset universe, bitcoin gains 0.8% to $1.0870. $38,700.

Quentin Soubranne – ©2022 BFM Bourse