The Paris Stock Exchange broke a new record above 7,600 points on Thursday in early trading and rose sharply by 0.84%, after the American central bank indicated that it had discussed a timetable for interest rate cuts. directors. The star CAC 40 index climbed 65.93 points to 7,594.11 points around 10:10 a.m., after reaching a peak at 7,653.99 points, its new record. The CAC 40 had already crossed a new historic peak Tuesday morning during the session, at 7582.47 points. The American central bank, the Fed, maintained its key rates on Wednesday evening. A majority of its managers anticipate three or four reductions next year, to bring them to 4.6% at the end of 2024.
The institution’s chairman, Jerome Powell, warned that Fed officials had “not ruled out” the possibility of raising rates again, but he also acknowledged that the monetary committee had discussed the start of timetable for rate cuts. “This is a big change from the last time the Fed chairman spoke and said that rates would remain high for a long time,” comments Ipek Ozkardeskaya, analyst at Swissquote Bank. Wall Street celebrated these announcements on Wednesday: the Dow Jones index gained 1.40%, climbing above 37,000 points for the first time in its history.
On the bond market, interest rates on sovereign debts are falling sharply. The yield on France’s ten-year debt fell sharply to 2.57%, the lowest since March 2023, compared to 2.71% at Wednesday’s close, before the Fed’s announcements. Short-term interest rates also fell. Investors anticipate that the British (BoE) and European (ECB) central banks will also maintain their key rates at the end of their meetings today. “It will be interesting to see if ECB and BoE officials feel comfortable abandoning their tough talk,” anticipates Ipek Ozkardeskaya, who thinks that ECB President Christine Lagarde “will repeat that it is too early to talk about rate cuts.”
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The media and publishing giant Vivendi climbed 8.60% to 9.73 euros, after the announcement of a plan to split its activities into several listed entities, structured in particular around Canal, Havas and an investment company including its majority stake in the Lagardère group.
Vivendi explained that it was undergoing “a very high conglomerate discount”, meaning that the current market valuation of the group would be lower than the sum of the values of its subsidiaries and stakes in different companies.
Shares of companies in the real estate sector are celebrating on Thursday. The rise in interest rates had weighed heavily on their activities in 2023.
Unibail-Rodamco-Westfield climbed 5.35% to 66.26 euros, Icade 5.49% to 35 euros, Klepierre 4.18% to 24.65 euros, Gecina 3.34% to 111.50 euros and Covivio by 5.64% to 49.04 euros.
Other stocks sensitive to interest rates also benefit, such as the automobile sector with Forvia (7.57% to 20.38 euros) and Valeo (6.33% to 13.87 euros), or also Air France- KLM (6.71% to 13.01 euros).
The Crédit Agricole banking group (2.46% to 12.91 euros) committed Thursday to no longer financing any new fossil fuel extraction projects and to reducing the CO2 emitted by projects financed on the oil and gas by 2030, the day after the agreement reached at COP28 in Dubai.
