CAC40: over 8000 pts, banking stocks in support

(CercleFinance.com) - The Paris stock market gained almost 0.
3% this morning, around 8020 points, driven by STMicro (+3.5%), Pernod Ricard (+2.6%) and the banking sector (+1.5% for Société Générale, +1.2% for BNP Paribas and 1% for Crédit Agricole).

On the eve of public holidays (Armistice and Ascension) and in the absence of major economic indicators, a wait-and-see attitude is likely to prevail on the markets.

Against this backdrop, some strategists are beginning to worry about the stock markets' heavy dependence on the performance of technology mega-caps.

"Equity markets are highly concentrated, focusing on the 'Magnificent Seven', with a wide dispersion of performance at stock level", points out Nanette Hechler-Fayd'herbe, analyst at Lombard Odier.

Historically, such high levels of concentration have often been followed by a return to the mean, against a backdrop of stock market correction", she warns.

Despite these concerns about tech valuations, other professionals are more optimistic, believing that this hype is justified by the historic period the sector is currently experiencing.

We believe that tech stocks should benefit in the coming months from a combination of three factors: the AI infrastructure boom, the rebound in demand from major cloud service providers, and the craze for generative AI with concrete applications in digital advertising", stresses Christopher Dembik, Investment Strategy Advisor at Pictet AM.

On the statistics front, seasonally-adjusted retail sales volumes rose by 0.8% in March in theeurozoneand by 1.2% in the EU, compared with February 2024, according to estimates from Eurostat, the European Union's statistical office.

In France, the trade balance improved slightly in March, according to CVS-CJO data from the customs administration, with the deficit narrowing to 5.47 billion euros from 5.61 billion in February.

This timid improvement reflects a 2.9% month-on-month increase in French exports, to over 52.2 billion euros, while imports rose by less than 2.4%, to 57.7 billion.

In other French company news, Arkema reported a 14.8% drop in net income before non-recurring items to ?138 million for the first quarter of 2024, or ?1.84 per share, and a 4.6% decline in EBITDA to ?350 million, giving an EBITDA margin slightly up by 0.5 points to 15%.

Bouygues reports net income, group share, of -146 million euros for the first quarter of 2024, a loss widened by 12 million year-on-year, but recurring operating income from activities (ROCA) of 26 million euros, an improvement of 17 million.

On the occasion of Xi Jinping's state visit to France, TotalEnergies announced the signing of a strategic cooperation agreement with the Chinese energy group Sinopec, aimed at deepening their collaboration, particularly in low-carbon energies.

Finally, Suez announced the signing of three strategic agreements on ecological transition with its Chinese partners Envision, Chongqing Sanfeng Environment and Dongguan Water Group.


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