CAC 40 Moves Into Positive Territory as Euro Drops on Draghi Press Conference

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Mirroring most of the major benchmark equities indices around Europe today, the CAC 40 opened up on yesterday’s close before an early drop has seen it spend the majority of the day so far in negative territory. Initial optimism engendered by Fed Chair Janet Yellen’s hawkish comments on the U.S. economy yesterday, repetition that the Fed expects to make several incremental interest rate hikes this year up until 2019, gave way to waiting on the output of today’s ECB meeting. The outcome was as anticipated and ECB interest rates will remain as they are for the foreseeable future while the present stimulus package of bond buying will also remain unchanged.

ECB chief Mario Draghi is currently talking to the press and his dovish words on core inflation and growth is causing a drop in the euro, down 0.25%. It’s nothing major though and while a slightly more bullish attitude may have been expected the chances are the euro will show some recovery from its drop even before the end of today’s trading. Indices, including the CAC, have moved in the opposite direction to the euro and France’s benchmark index is currently up 0.18% on yesterday’s close.

Banks have been boosted today by the confirmed prospect of 3-4 interest rate hikes to take place throughout the year in the U.S. BNP Paribas is up 0.74% so far, Credit Agricole 0.61% and Societe Generale 0.75%. Insurer AXA is up 0.76%.

Carmaker Renault is the biggest gainer today with a return of 1.77% at present. Peer Peugeot is up 0.65%. Carlos Ghosn, chief executive of the Renault-Nissan auto alliance spoke to Reuters yesterday at the World Economic Forum in Davos and intimated that the market leaders in electric vehicles are planning on increasing investment.

Ghosn also revealed that the alliance has now sold 400,000 plug-in cars globally.

Beverages giant Pernod Ricard is up 1.54%. The company announced today that it is investing 10.5 million euro to upgrade its Cork distillery, where brands including Jamieson’s are produced. The investment is expected to boost production capacity by around a third. Luxury brand holding LVMH Moet Hennessey Louis Vuitton is also 1.17% to the good and Airbus up 1.14%.

The heaviest loss today has been sustained by aerospace engineering company Safran, which is down 3.43%. It was announced today that Safran is to acquire aircraft seat and cabin specialist Zodiac Aerospace, also a French company, in an $8.5-$10 billion deal. Essilor International, the lense maker currently involved in a merger with Italian eyewear frames giant Luxottica, has dropped 2.95% and mall investor and operator Klepierre 2.2%. Peer Unibail Rodamco is down 1.56%.

Elsewhere, steelmaker ArcelorMittal has shed 1.34%, electric utility Engie 1.15% and oil giant Total 1.23%.

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