French Financial Media Predict ‘Trump Tornado’ to Blow 4% from CAC 40

on Nov 9, 2016
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Market predictions in the French financial press at opening bell this morning were for the CAC 40 to follow Asian markets to heavy losses today on news that Donald Trump has secured a shock victory to win the U.S. presidency. As news began filtering through that a curveball Trump win was on the cards, Asian markets saw sharp losses. The Nikkei 225 was the biggest loser, down 5.4%. However, losses were perhaps not as great as might have been expected with most Asian markets seeing some kind of rally before closing. In the end Hong Kong’s Hang Seng was down 2.2%, South Korea’s Kospi 2.7%, Australia’s ASX 200 1.9% and the Shanghai Composite was only a modest 0.6% down.

**Initial Fears for CAC 40 Overcooked?**
Asian markets actually saw bigger losses on the back of June’s Brexit referendum. This might suggest that despite the fact that a Clinton victory had widely been considered to have been priced in by markets, the reaction to Trump’s victory may be less drastic than feared.
Market data at 08:00 am this morning showed that futures for the CAC 40 in November were down 195 points, leading to predictions of a 4% loss today. While the CAC 40 opened 2.875% down on yesterday’s close, there has since been a rally and it is currently only a little over 1% down. This mirrors other European markets with the FTSE 100 in London having returned to around yesterday’s closing level within a couple of hours of opening, at one point even surpassing it, despite opening 1.6% down. The DAX 30 has also rallied since opening 2.9% down to gain over 2% since.

**Sanofi Up Over 3%**
Sanofi has been the big winner in the CAC 40 today as pharmaceuticals around Europe see their share price up on the back of Trump’s victory. Clinton had promised a crackdown on rising drug prices. Steel producer ArcelorMittal is the other big gainer today, also up over 3%. Arcelor’s rising share price, however, is the result of yesterday’s results announcement showing that the company had returned to profit, rather than any real connection to the U.S. election.

**Renault Down 3.5%**
The biggest loser is Renault, down over 3.5% at the time of writing on fears that a Trump presidency will result in higher levels of protectionism for U.S. car manufacturers. Peugeot is down 1.5%. L’Oreal and Pernod Ricard are also significant losers, at 2.9% and 2.25% respectively, also presumably on concerns that the U.S may become a more restricted market for foreign producers of consumer products.

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