The Paris Stock Exchange returned to the red on Monday (-3.32%), after having rebounded last Friday and despite new support measures announced by the Federal Reserve (Fed).
The CAC 40 index dropped 134.49 points to 3,914.31 points. On Friday, it finished up 5.01%.
The Parisian market plunged by more than 4% from the opening, before reducing its losses thanks to a support plan announced by the Fed.
The American monetary institution recalled that it would do everything to help the markets to continue to function and launched a new program of 300 billion dollars in aid to “support the flow of credit to employers, consumers and businesses” .
But investor optimism was short lived.
“The market sees what the states are doing, it sees the budgetary measures as well as the monetary measures on the part of the central banks, but for the moment it is still struggling to put a price on the final risk, that is to say how much the epidemic of coronavirus will cost the world economy, “analyzed Mr. Baradez.
“So that he can specify the price of the risk, he must have a little more visibility on the evolution of the virus,” he continued.
The cases of contamination blazed Sunday in Europe, in particular in Italy where the situation turns to “tragedy”, and in the United States where the concern mounts with hospitals which are likely to be quickly overwhelmed.
Containment measures, which could be tightened on Monday in France, have also extended to Greece, the United States of New York and New Zealand, which the Central Bank has also announced a plan purchase of bonds.
The German government on Monday adopted measures of several hundred billion euros, unprecedented since the Second World War, to fight the recession expected due to the economic impact of the coronavirus.
The World Health Organization said on Monday that the coronavirus pandemic “is accelerating” but that its trajectory could be changed.
– Airbus plummets –
In terms of values, the market had to take a series of warnings about the results of French companies, such as TF1, Vinci, Airbus, Saint-Gobain, Kering and even Total.
“There will be other warnings on results that will arrive in the days or weeks to come. The first semester will be one of the worst semesters of economic history in the 21st century,” warned Alexandre Baradez.
At the close of the market, Airbus plunged 13.77% to 55.00 euros after canceling the payment of dividends to its shareholders for 2019 as well as its forecast results for 2020.
Orpea slipped 5.26% to 89.15 euros. The coronavirus is already hitting nursing homes across the country, making professionals in the sector fear the worst. Last week, the number two French retirement homes and private clinics announced that a quarantine of residents were currently affected by Covid-19, as well as twenty employees.
Saint-Gobain dropped 4.20% to 17.94 euros.
Kering ended on a loss of 3.28% to 405.95 euros. The luxury giant warned that its turnover would fall by several hundred million euros in the first quarter as a result of the crisis related to the new coronavirus.