Paris Stock Exchange ended Friday with a slight decline, driven by investor caution ahead of the Federal Reserve meeting next week and political changes, including the appointment of François Bayrou as prime minister. The CAC 40 dropped by 11.37 points to 7409.57, reflecting a 0.23% weekly decrease. Bond yields rose, and while Soitec shares surged, declines were seen in Casino, Euroapi, and Eutelsat. Planisware and MedinCell noted gains, with the CAC 40 index composition remaining stable.
Paris Stock Exchange Closes Slightly Lower Ahead of Fed Meeting
The Paris Stock Exchange wrapped up trading on Friday with a modest decline, as investors opted for caution in light of the recent appointment of a new prime minister. The market appears to be holding its breath ahead of the forthcoming American Federal Reserve meeting scheduled for next week. The CAC 40, which serves as the benchmark index, fell by 11.37 points, finishing at 7409.57 points, marking a weekly decrease of 0.23%.
Political Developments and Market Sentiment
A significant political development took center stage during the session, with President Emmanuel Macron appointing François Bayrou as the new prime minister. Bayrou is now tasked with navigating the ongoing political crisis sparked by the recent dissolution and the censure of Michel Barnier. However, Frédéric Rozier, a portfolio manager at Mirabaud, pointed out that there has been little to no market reaction to these political changes. He stated, “There is no reason for the market to react” until the unvoted 2025 budget is announced, especially as France grapples with substantial debt and a significant deficit projected for 2024, exceeding 6%.
On the bond market, the interest rate for ten-year French government bonds increased, climbing to 3.04% from 2.99% the previous day, while German bonds saw a slight rise to 2.26% from 2.20%.
As investors remain on the sidelines, eyes are set on the Federal Reserve’s monetary policy meeting on December 17 and 18. Despite a recent uptick in inflation within the United States, a quarter-point cut from the Fed is widely anticipated. Should this reduction be confirmed, it would mark the last before the incoming Trump administration potentially implements inflationary policies. On Thursday, the European Central Bank announced a 0.25-point cut in its key rates, but it also downgraded growth forecasts for the eurozone, leading to a more cautious investor sentiment.
Stock Movements: Soitec and Planisware Updates
In individual stock movements, Soitec experienced a notable rebound, with its share price surging by 6.47% to reach 86.45 euros. This rise follows positive comments from Bernstein analysts, who believe the semiconductor wafer manufacturer is on a recovery trajectory after facing several warnings.
In a shift within the SBF 120 index, the Casino distribution group saw a decline of 1.26% to 1.10 euros as it exits the index, effective December 23. This change was part of Euronext’s quarterly review. Meanwhile, pharmaceutical active ingredient manufacturer Euroapi saw its shares drop by 5.23% to 2.97 euros, and satellite operator Eutelsat fell by 3.59% to 3.01 euros, both losing their positions in the SBF 120.
On a positive note, software publisher Planisware, which recently went public in April, gained 1.09% to reach 27.36 euros. Additionally, chemist Robertet saw a slight increase of 0.35% to 872.00 euros, while pharmaceutical firm MedinCell experienced a significant rise of 8.52%, reaching 16.30 euros. Notably, the composition of the CAC 40 index remains unchanged.