(BFM Bourse) – The price of North Sea oil Brent has just fallen nearly 25% from a 2008 peak recorded last week. A factor likely to ease inflationary pressures, giving investors some reassurance. The CAC rose by 1.75% in this context.
Unaffected by the 2.6% drop recorded Monday by the Shanghai Stock Exchange after the application of a new lockdown in Shenzen in the face of a new outbreak of the Omicron variant, the Paris market’s flagship index grew by 1. 75% to 6,369.94 points, continuing last week’s momentum.
The confinement of the Chinese conurbation, nicknamed the “Silicon Valley of China” for its vital role in new technologies, is paradoxically contributing to the easing of oil prices, as these new restrictions could slow down China’s energy demand. The barrel of WTI crude fell to $102.38 (-6.36%) and Brent lost 6.12% to $105.78 after hitting a high since 2008 at $139 just a week ago. The correction recorded has somewhat mitigated the inflation threat, indirectly benefiting equity markets.
Operators were also sensitive to the relatively positive tone of comments from both the Ukrainian and Russian sides in view of further discussions – although the situation on the ground is only getting more difficult. This week, investors will also pay particular attention to Jerome Powell’s speech, as a first tightening in interest rates is expected. Decide on Thursday at 7:30 PM Paris time (and not 8:30 PM, as daylight saving time is already in effect across the Atlantic).
Banks benefit from rising bond yields
Admittedly, still less than half of its value a year ago, Alstom continued its rebound that started last week and recorded the best performance of the CAC (+5.2%). Already well oriented on Friday with the announcement of its financial statements, EssilorLuxottica gained another 4.7% on Monday.
The banking sector recovered (+3.9% for Societe Generale and +4% for GNP) thanks to the recovery in bond yields. Danone’s new strategic plan (+4%) seemed unanimous, prompting several analysts to increase their targets.
The automotive industry in general also regained its appeal, but Stellantis (+3.9%) benefited the most, while Carlos Tavares does not rule out the possibility of the group catching up with Tesla in the electric vehicle market in the coming years. The manager defended himself against any arrogance, saying he was nevertheless confident in the European group’s (and the American via Chrysler’s) ability to fill the gap.
Sanofi failure in breast cancer
Of the 40 core values, only Sanofi remains significantly on the sidelines due to the failure of the “AMEERA-3” clinical trial on an experimental compound, amcenestrant, as a treatment for breast cancer.
Outside of the flagship index, Groupe Gorgé stood out, gaining 11% thanks to the proposed merger of its subsidiary ECA with iXblue, a high-tech nugget coveted by several defense players. The merger project values the new entity at EUR 800 million and does not require dilutive financing for current shareholders.
EDF managed to finish almost stable, while the group adjusted upwards the impact of the production decrease and government measures (increase in the volume of nuclear energy that the group sells at a loss to its competitors) on its 2022 results. Rubis, on the other hand, lost more than 8%, canceling out the progress made with the announcement of the 2021 results of the company specializing in the storage and distribution of petroleum products.
Guillaume Bayre – ©2022 BFM Bourse