The Paris Bourse ended sharply lower, close to 4,000 items – Les Echos

The Paris Bourse is approaching 4,000 points! The CAC 40 index ended its first session of the week down by 3.20% to 4,066 points after hitting its lowest level since late 2014. Below the course that was his August 24, when fears for the health of the global economy reached proportions not seen since the crisis of 2008. the Paris Bourse is not the only one dive. The Euro Stoxx 50 index also unscrewed from 3.43% and fell to its lowest since September 2013 … The start of the week only confirms the trend of a year marked by a resurgence of risk aversion.

In recent weeks, investors piled the sum of all fears. There is first fear about economic growth and in particular the US and Chinese economies. While most Asian markets were closed Monday because of the Chinese New Year, continued hemorrhage affecting the reserves of the central bank of the world’s second largest economy, fears of a further decline in the yuan, which could penalize emerging Chinese partners.

Regarding the US, recession fears remain high as growth slows and job creation in January was below expectations. This causes extra uncertainty about what the Fed will do next March. Meanwhile, US stocks suffered since the beginning of the year. The Nasdaq lost 2.82% after the opening of markets on Wall Street. It plunged 12.9% since the beginning of the year, the lowest since October 2014. The drop is severe for values ​​like Tesla Motor (-32% since January 1st), Tripadvisor (-31.5% ), netflix (-27%) or Amazon (-25%). If there is nothing really new about the US economy since Friday, we feel a distrust increasingly strong market. As for the Dow Jones, it dropped 2.25% after opening.

Oil under $ 30

in addition, the relapse oil, WTI has lost up to 3% to 29.95 dollars a barrel before returning above the 30 dollar mark, symbol of these concerns about global growth, while the oil supply remains in surplus. Equity markets, particularly in Europe, are increasingly correlated with oil prices.

Furthermore, the market is also concerned for the banks in the peripheral countries’ health. This was the case in Portugal, then Italy and now the wave hits Greece. The Athens Stock Exchange fell by over 7% in mid-session in the wake of banking stocks. The market is concerned about a possible new stalled negotiations between Tsipras government and creditors on the difficult pension reform. The banking index FTSEB tumbles 19.61%. In Paris, BNP Paribas and Societe Generale lost 3.80%.

Finally, there are fears about politics and geopolitics. The rise of populism in Europe continues to worry investors while looming in a few months to hold a referendum on membership of the United Kingdom to the European Union. The latest polls, not always very good at predicting England, shows that the gap in favor of Brexit increases.

Fall cyclicals

In this context, cyclical stocks are battered at the Paris Bourse. ArcelorMittal fall of 7.69%, Cap Gemini coward 7.10%, 6.96% LafargeHolcim. There is no value up on the CAC 40, Engie not losing “only” 1.14%, Pernod Ricard 1.16% and 1.18% LVMH.

accordingly, investors are turning away a little more risky assets in favor of assets considered safer and primarily sovereign bonds. German ten-year rates of yield down almost over 7 basis points to 0.218%, while the French 10 years is 0.593% (-3.7 bp). The 10-year Japanese for his part has never been close to zero (.029%), while the US 10-year fell to 1.75%. Finally, gold continues to rebound. The ounce gaining 3.18% to 1,194 dollars.