Paris Stock Exchange faces a 0.4% decline in the CAC40 index, influenced by drops from Schneider Electric and Air Liquide, despite gains from Veolia and Carrefour. In Germany, the DAX index rises 0.8% after conservative election wins ease political concerns. Upcoming earnings reports from Nvidia and other major companies are anticipated. Meanwhile, Germany’s business climate index remains steady, and bond yields increase while gold prices reach record highs. Corporate developments include new results from Sanofi and partnerships involving Atos and Thales.
Market Update: Paris Stock Exchange Declines Amid Political Developments
The Paris Stock Exchange is experiencing a downturn as the CAC40 index falls by 0.4%, hovering around the 8,125 mark. The trading session began with notable volatility, with the index oscillating between 8,150 and 8,100 earlier in the day. Key contributors to this decline include Schneider Electric, which saw a drop of 3.8%, and Air Liquide, down by 1.7%. On a positive note, gains from companies like Veolia and Carrefour, both up by 2.8%, as well as Thales, which rose by 2.5%, are providing some support.
Political Landscape and its Impact on Markets
Meanwhile, in Germany, the DAX index has surged nearly 0.8%, briefly touching 22,500 points following the conservative victory in the recent legislative elections. This outcome alleviates concerns regarding escalating political risks in Europe. According to final election results, the CDU/CSU alliance secured 28.6% of the votes, outpacing the far-right AfD party at 20.8%, while the Social Democrats (SPD) captured just 16.4%, marking their lowest score since the post-war era.
Investors who were anxious about the potential rise of populism due to the AfD’s recent polling gains can now breathe a sigh of relief, although it was widely believed that the AfD would not attain power. The limited movement of the euro post-election results indicates that the markets had effectively anticipated this outcome, as noted by Michael Brown, strategist at Pepperstone.
Markets generally perceive the German conservatives as favorable for business, but questions remain regarding the CDU/CSU’s ability to govern effectively. Analysts at Deutsche Bank suggest that a coalition with the SPD, similar to previous ‘grand coalitions’, is the most probable outcome, given the conservatives’ reluctance to engage with the AfD or leftist parties.
This week is expected to be eventful, beginning with Nvidia’s quarterly earnings report due on Wednesday evening. Investors are optimistic about the company’s performance in the AI sector, which has propelled Wall Street to unprecedented heights over the past 18 months. Dan Ives, an analyst at Wedbush Securities, anticipates strong results that could ease market jitters.
In addition to Nvidia, major corporations such as Home Depot and Salesforce will also announce their quarterly results shortly. Several prominent European firms, including AN InBev, Allianz, AXA, BASF, Danone, Deutsche Telekom, Saint-Gobain, and Stellantis, will follow suit.
On the economic front, Germany’s business climate remained stable in February, with the Ifo business climate index unchanged at 85.2, contrary to expectations of a slight increase. This reflects the cautious sentiment prevailing among German businesses leading up to the legislative elections, according to Ifo’s report.
In bond markets, Bund yields are up by 3 points to 2.496%, while French OATs have risen by 2.3 points to 3.2400. T-Bonds in the U.S. have added 2 points to 4.44%, with 30-year bonds up by 2.5 points to 4.694%. Gold prices have reached new heights at $2,970/Oz for April contracts and $2,956 in spot prices, marking a new all-time record, while oil prices remain stagnant around $74.3.
In corporate news from France, Sanofi and Teva Pharmaceuticals have released new detailed results from their phase IIb RELIEVE UCCD study focusing on duvakitug for patients with moderate to severe ulcerative colitis and Crohn’s disease. Atos has announced its success in securing a contract for project management assistance related to information systems security from the Hospital IT Purchasing Center (CAIH). Additionally, SES has partnered with Quvia, an American firm specializing in AI-driven quality of experience management. Thales has also entered into a memorandum of understanding with Qatar Airways to establish a maintenance center for in-flight entertainment services in Doha.