CAC 40: CAC began to fall violently again in response to the intensification of Russian bombardments

(BFM Bourse) – The Paris market’s flagship index, which managed to contain its decline (-1.39%) on Monday, fell sharply again on Tuesday as Russia announced it would continue its offensive in Ukraine “until all targets are gone”. obtained.

Despite international condemnation and the painful sanctions that should have plunged the Russian economy into deep recession, it is clear that Moscow has no intention of backing down. As the Ukrainian military faced a new offensive by Russian forces in Kyiv, Kharkov and various cities of the country on Tuesday, the day after the first failed talks, the Ukrainian military, through Russian Defense Minister Sergei Shoigu, announced that it would “continue its offensive until the end”, that is, “all objectives have been achieved”. “Demilitarization” and “denazification” of Ukraine.

This new escalation in tensions after a relative easing caused a new drop in European stock markets on Tuesday. The CAC 40 thus fell 2.62% to 6,484 points, its lowest level since the beginning of October, after a near-balance opening.

“The meeting between Ukrainian and Russian officials at the Belarus border was inconclusive on Monday, but they agreed to meet again. That was enough for the market to try to ‘price’ the escalation on the Ukrainian front,” says analyst Jeffrey Halley. According to Oanda, “markets may have the impression that the worst of bad news is now over”, especially ahead of sanctions. “I’m not sure but the market is always right and we have to respect momentum from a short-term perspective,” he added. Invited to France Info this Tuesday morning, French Economy Minister Bruno Le Maire agreed with the analyst, saying the EU would “cause the collapse of the Russian economy”. “The balance of economic and financial power is entirely in favor of the European Union, which is in the process of discovering its economic power,” he said.

“The trend is clearly fueled by the “leading news” in Ukraine,” said John Plassard, Vice President of Investments at Mirabaud. . And in this context, the latest news is nothing short of reassuring. On the 6th day of the Russian occupation, the central square of Kharkov was bombed and a 60 km long column of Russian armored vehicles approached Kiev.

TotalEnergies and Engie in the landscapes of the French State

When asked about the activities of French giants TotalEnergies and Engie in Russia, Bruno Le Maire assessed that with anyone close to Russia’s power there was now “a question of principle to work with”, the economy minister surmised. Bruno Le Maire. Engie, part of the Nord Stream 2 gas pipeline program suspended by Germany, fell 7.3% at 11:25 a.m. TotalEnergies, which is involved in many natural gas projects, especially Novatek (18.9% of which it has a shareholder), makes an additional 2.8% sales.

Balanced at the start of the session, CAC’s ranking has since turned sharply red as only Orange (+0.3%) and above all Thales (+5.6%) resisted the overall drop around 11:40. On the other hand, groups exposed to Russia suffered from the new escalation, notably Renault (-4.8%) and Alstom (-6.3%).

While the entire automotive sector fell sharply, new car sales fell for the ninth consecutive month in France in February (-13.1% in a year), still hampered by a shortage of electronic chips. Besides Renault, it outperformed Faurecia (-6.2%), Plastic Omnium (-3.7%), Valeo (-4.2%) and even Michelin (-3.2%) benchmarks.

Following the news, Atos disappointed investors again, especially in terms of operating margin, which fell 13.6% at 11:45, below expectations.

Franco-Austrian biotech company Valneva also announced that it has received its first license from a health authority for its anti-Kovid vaccine in Bahrain, which has already pre-ordered one million doses. Its head is glowing at 1.5%. Cerinnov (+6.8%), a supplier of robotic equipment to ceramics and glass manufacturers, returned to solid growth in 2021.

Over $100 a barrel of Brent

Crude oil prices rose again on Tuesday, suspended due to the war in Ukraine and sanctions on Russia, the world’s second-largest exporter of black gold. At 11:55 a.m. for May delivery from the North Sea, a barrel of Brent is trading at $101.6, up 3.7% from the previous day. On the other hand, WTI was up 3.1% to $98.7 a barrel.

Finally, in the foreign exchange market, traders are still turning to the dollar, which has revived its safe-haven status, thus the single currency is down 0.37% to $1,1180.

Quentin Soubranne – ©2022 BFM Exchange