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The CAC 40 opened Wednesday lower in line with the rest of Europe’s major indices and into the afternoon is down 0.42%. With markets holding fire until this evening’s statement on the Fed on interest rate hikes and monetary policy, there seem little chance at the moment that the CAC will succeed in breaking into positive territory before the day’s conclusion. From its opening position 0.51% below yesterday’s close, the French benchmark index tracked lower in the lead-up to midday. A recovery over the past couple of hours has lost steam though and there appears to be a lack of any obvious catalyst that might pull the CAC up today.
There are no companies on the CAC today suffering particularly heavy losses and it is more a case of caution ahead of Yellen’s Fed statement on 2017 interest rate hikes which is subduing markets. An immediate 0.25% interest rate hike is considered to be a given and attention is on possible further increases throughout 2017. One the markets would likely take in their stride but the potential of an announcement of two hikes planned next year is a scenario that markets would likely react more sharply to.
Pharmaceuticals company Sanofi has fallen by the greatest margin today, recording a current loss of 2.6%. News has broken today that the French drugmaker has entered talks to acquire Europe’s largest biotech company, Switzerland’s Actelion. The Swiss had been in talks with Johnson & Johnson over a buy-out but with Americans having walked away for the second time in two years as negotiations floundered, Sanofi have stepped in. Sanofi will see the acquisition as a key part of its strategy to tackle slow growth, expiring patents and increased competition, particularly from the U.S. If the deal were to go through it would likely be worth something around the $30 billion mark.
In risers, Accor has the strongest showing so far, up 1.12%. Last week the hotel group announced an agreement to buy a 5% stake in the luxury Banyan Tree hotel brand with an option for an additional 5%.
The Singaporean group has 4 luxury hotel brands with 43 hotels and resorts between them, as well as 64 spas and 3 golf courses. The company’s assets cover 28 countries. Among the CAC’s constituents from the banking sector, Credit Agricole is 0.95% up while BNP Paribas and Societe Generale are down by 0.95% and 0.66% respectively.
