The Paris Stock Exchange opened sharply lower on Tuesday, weighed down by rising Sino-American tensions and the ever-increasing spread of the Covid-19 around the world.
At 09:12, the CAC 40 index lost 1.46%, or 73.90 points, to 4,982.33 points. The day before, it had finished up 1.73%.
“Growing tensions between the United States and China over Beijing’s land claims in the South China Sea are weighing on morale,” said David Madden, an analyst at CMC Markets.
China accused the United States on Tuesday of “sabotaging regional peace and stability”, after statements by foreign minister Mike Pompeo regarding Beijing’s claims as “illegal”.
Madden said “the reintroduction of containment measures also weigh” while “many countries continue to fight Covid-19”.
California and several other regions of the world, faced with an explosion in the number of infections, again adopt severe restrictions, while the WHO is alarmed to see “too many countries (going) in the wrong direction” and undermining public confidence for lack of clear messages.
The pandemic thus continues to worsen with around 13 million confirmed cases.
“Yesterday an optimistic current ran through the markets” thanks to encouraging news in the direction of a vaccine or treatment against the coronavirus, which in particular allowed European indices to end up, noted Mr. Madden.
Investors will watch the start of the earnings season in the United States with a series of heavyweights, especially banks Citigroup, Wells Fargo and JPMorgan Chase as well as those of Delta Air Lines.
The decline of several major technology stocks the day before on Wall Street was clearly felt: Dassault Systemes fell 2.72% to 153.65 euros, STMicroelectronics 2.13% to 25.31 euros and Worldline 2.34% to 75.98 euros.
The plunge continued for Ubisoft (-3.10% to 71.36 euros) two days after a game presentation deemed disappointing by the market and while the publisher is struggling in a sexual harassment scandal.
Air France-KLM fell 0.29% to 4.09 euros. The group is at the heart of a diplomatic quarrel between Paris and Beijing which on Tuesday castigated France’s decision to limit Chinese flights to France to one per week, in the name of reciprocity vis-a-vis ‘Air France.