A wind of optimism is blowing through the Paris Stock Exchange this Thursday, March 11, as the CAC 40 index crosses the symbolic threshold of 6,000 points, a first since February 21, 2020.
The Paris Stock Exchange is gradually recovering from the bills inflicted by the health crisis and is crossing the 6,000 point threshold for the first time since February 21, 2020. This Thursday, at the opening, the flagship index records a score of 6,004.16 and is within 2% of its peak of 6,111 points.
Up to 0.23%, this gain is said to be driven by the vaccination campaign moving forward in Israel, the United States, and the United Kingdom. In addition, the approval of Janssen’s single-dose vaccine, which was approved today for release in the European Union, could facilitate and accelerate this campaign in the Old Continent.
“The final exit from the crisis is in sight,” explains Régis Bégué of Lazard Frères Gestion. “The major stocks of the CAC 40 are very linked to the global economy, they will benefit from the recovery of the activity of China in the United States,” he adds.
The OECD has also revised its forecasts upwards, expecting global growth to reach 5.6% in 2021, driven by vaccination, but also by the US stimulus package of 1.9 trillion dollars, which alone is responsible for 1% of this global growth. This colossal American stimulus plan, put in place by President Joe Biden, was adopted by Congress last night, confirming the OECD’s forecasts.
Thus, the results for 2020 have reassured analysts and herald a solid and imminent recovery. In addition to luxury goods and technology, the Parisian CAC 40 index will also be driven by banks, commodities, construction, and automobiles. Indeed, since the start of 2021, Saint-Gobain has seen a significant rise of 30%, while Société Générale has climbed 28%.
“Investors are selling the Nasdaq to buy the CAC,” says François Breton of Edmond de Rothschild AM. “Historically, the phases of recovery of the activity are particularly favorable to the Parisian index,” he explains.
Representing more than a fifth of the CAC 40, one sector is particularly watchable: the luxury sector. Indeed, this rise in rates could represent a risk for the CAC 40 index. At the close of business today, the French luxury giants were all up: LVMH was up 0.45% at 555 points, Hermès was up 2.27% at 946 points and Kering was up 0.78% at 581 points.
“The equity markets have become accustomed to lower interest rates in recent years. With their rise, we are reintroducing the notion of risk in financial investment” and thus, “the luxury sector could prove vulnerable to a more general questioning of valuations,” said Gilles Guibout of Axa IM.
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