CAC 40 Stages Afternoon Rally to Move Positive After Bad Start to Wednesday

Peugeot share price accelerates on best year since 2010

CAC 40 Stages Afternoon Rally to Move Positive After Bad Start to Wednesday

In keeping with the pattern of the majority of major European indices today the CAC 40 started the day flat on falling oil prices and market hesitancy in the lead up to Trump’s first official press conference as President-elect, likely to be underway by the time you read this. That hesitancy led to a quick drop in early trading before a recovery between 10:00 and noon. Having spent the majority of the afternoon bumping along flat, the CAC has taken a turn for the better with oil up and markets clearly expecting a positive reaction to Trump’s press conference.

Given the pattern since his election in November, as long as the President-elect talks about tax cuts and infrastructure spending, while avoiding saying anything too aggressively protectionist when touching on foreign trade policy, they are probably right.

Peugeot is today’s biggest gainer after the company announced that global vehicle deliveries rose by 5.8% over 2016 to 3.146 million sales. Recovery in the European car market, which accounted for 61% of total sales and had 3.56% growth and the lifting of sanctions on Iran were the major catalysts for the company’s best annual performance since 2010. Peer Renault is up 0.87%.

Another big riser today is luxury brands-holding Kering, owner of Gucci and Puma, which is up 3.42%. In a surprise announcement yesterday the company confirmed the CEO of Balenciaga, on of its stable of brands with turnover of 400 euros, was leaving the group. Isabelle Guichot’s departure is the latest in a long line of management and creative leadership shake-ups at Kering over the past two years, a difficult period for the luxury goods sector.

Steelmaker ArcelorMittal is up 2.52%. Steel prices are expected to keep rising after China reiterated that it will move to shut down illegal induction furnaces that operate around the country and produce low-grade steel that accounts for up to 9% of output. China is the world’s largest steelmaker and shutting down the induction furnace steel industry is raising the price of Chinese steel, which sets the floor for international steel prices. Other companies recording good results on Wednesday include Air Liquide (+1.24%), Bouygues (+1.23%), Michelin (+1.58%), LVMH Moet Hennessy Louis Vuitton (+1.13%) and Technip (+1.66%).

In fallers today, electric utility Engie has taken the biggest hit with a loss of 2.89%. The drop comes as the French state announced that it had sold 100 million shares in the company for 1.14 billion euros. The government had previously announced that it would sell 90 million. It still owns 28.7% of the company. The capital raised is earmarked to finance a bailout of struggling nuclear company Areva. There are no other major losses today but management consultancy Cap Gemini are down 0.96% and Nokia 0.5%.

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