The Paris Stock Exchange fell back on Tuesday morning as Wall Street slipped its profits Monday night, overtaken by rising bond yields amid lingering uncertainties about inflation. These fears had the effect of dampening the initial momentum generated by the easing of health restrictions in China.
At 9.45 am the Bedroom 40 lost 0.44% to 6,519.93 points in a limited turnover volume of 240 million euros.
The yield on the 10-year US bond is trading at 3.02%, after rising above 3% on Monday for the first time since mid-May. The market remains focused on the price rise and the response of central banks to contain it.
The Bank of Australia persists and signs
This morning, the Bank of Australia raised its key interest rate by 50 basis points, twice as much as expected, to 0.85%, marking a second consecutive hike for the first time in 12 years.
Equity markets remain volatile and any attempt to recover is proving short-lived, amid fears that rising credit costs will affect corporate growth and profits. The European Central Bank will announce the end of its asset purchase program on Thursday and prepare markets for a rate hike in July. The next day, the market will learn about May inflation data in the US ahead of a likely 50 basis point rate hike from the Federal Reserve next week.
Dassault Systèmes sanctioned by a relegation
Closer to home, the UK is once again in political turmoil as Boris Johnson escapes a vote of no confidence. The prime minister was supported by 211 Conservative MPs, while 148 voted for his impeachment. If he got more support than the necessary 180, Boris Johnson’s score will be lower than Theresa May’s in 2018, who later had to resign.
Biggest drop in the Cac 40, Dassault Systems down 2.3%. Jefferies lowered his recommendation for the title of software publisher of design assistance from “hold” to “underperform” and lowered his price target from $40 to $33.
Valeo profit 0.9%%. Valeo Siemens eAutomotive, the joint venture between the French car supplier and the German industrialist, has announced that it has exceeded its target of 4 billion euros in order intake for high-voltage electrification technologies over the 2021-22 period.
Technip Energies valued at 1.1%. The energy industry engineering group has announced that it has won a feasibility study contract with French company Viridian Lithium to build a lithium refining and conversion plant in France. The financial aspect of the contract has not been disclosed.