The Paris Stock Exchange returns above 7,500 points, the highest since April

The luxury-led Paris stock market closed up 1.32% on Friday, December 15, returning to levels not seen since late April last year, also buoyed by the resilience of US economic activity.

The flagship CAC 40 index gained 98.03 points and closed above the 7,500 point mark for the first time since April 25. A day earlier, the Paris rating ended with a slight decrease (− 0.10%) to 7,428.52 points. For the week, the Paris rating increased by 2.46%, the fourth week of growth.

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The U.S. labor market was much stronger than expected in November, with 199,000 jobs added, up from 150,000 in October, according to data released by the Labor Department. “This number supports the idea that the inflation trajectory is under control”comments David Kruk, head of trading at La Financière de l’Echiquier.

As for the unemployment rate, after the increase in October it is again falling to 3.7%. Markets have responded well to this release as it strengthens “sweetheart scenario” for “inflation trajectory under control and moderate growth”according to David Kruk.

“Rates fell incredibly in November and early December”

For Christophe Boucher, chief investment officer of ABN AMRO Investment Solutions, the US employment numbers are indeed that “in line with the soft landing scenario” US economy, “and is not expected to prompt the Federal Reserve to cut interest rates in the near future”. In response, government debt rates on the bond market began to rise again. The yield on the 10-year French government bond was at 2.83% by 5:55 p.m. CEST, compared with 2.73% at Thursday’s close.

For Mr. Kruk, this balance is normal considering that “rates relaxed incredibly in November and early December”. For many analysts, the markets were a bit excited after the latest US inflation data, expecting several key interest rate cuts by the US central bank.

Vivendi’s progress

Luxury shares, a heavyweight in the Paris market, rose sharply on Friday, benefiting from evidence of the resilience of the US economy, an important market for the sector. The largest capitalization on the Paris Stock Exchange, LVMH, recorded the biggest increase of the session: +3.28% to 739.10 euros. Kering gained 2.58% to 413.80 euros and Hermès 1.48% to 1,982.40 euros.

Euronext’s scientific committee, independent of the exchange operator’s management, has decided that payments specialist Worldline will leave the CAC40 on December 18 to make way for media giant Vivendi, which left the flagship index just six months earlier. Worldline shares lost 1.27% to 15.55 euros, the biggest drop on the Paris Stock Exchange index. Vivendi shares rose 2.42% to 8.89 euros.

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The world with AFP

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