Solid News

CAC 40 Market Update

3/23/2023 1:00 PM

One of the leading indexes of the European economy, CAC 40, is correcting, trading at the level of 7090.0.

The French stock market remains under serious pressure due to domestic economic problems. Mass protest actions of trade unions continue in the country due to the increase in the retirement age from 62 to 64 years. At the end of this month, the largest French trade union association, the General Confederation of Labor (CGT), announced two more meetings of workers in the public sector of the economy, which are also planned to be joined by representatives of municipal and private companies. Given the downtime in the work of most enterprises, this situation will begin to affect production indicators in the near future. The authorities are ready to send employees of public utilities, as well as oil enterprises, to work in order to eliminate problems with the supply of fuel. Against this background, it is not worth counting on continued growth of the Manufacturing PMI in March.

One of the few factors that support the stock index is the correction in the domestic bond market. French 10-year Treasuries are trading at 2.829%, down from 3.200% at the start of the month, while 20-year French Treasuries are holding at 3.210% yields, down from 3.550% in the first week of March. In turn, annual debt securities lost 3.34%, trading at a rate of 2.997%.

The growth leaders in the index are L’Oreal SA (+2.13%), Pernod Ricard SA (+2.03%), Danone SA (+1.55%).

Among the leaders of the decline are WFD Unibail Rodamco NV (-7.50%), Capgemini SE (-1.79%), Societe Generale SA (-1.03%), Legrand SA (-0.81%).

On the daily chart, the index quotes are traded within the local ascending corridor, approaching the support line at 6800.0.

Technical indicators maintain a sell signal: the fast EMAs of the Alligator indicator are below the signal line, and the AO histogram, being in the sell zone, is forming corrective bars.

Support levels: 6960.0, 6780.0. | Resistance levels: 7170.0, 7386.0.

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