Paris Stock Exchange Rises Amid Sino-American Trade Developments
The CAC 40 index gains 1.37% as the US and China suspend most tariffs for 90 days.
The Paris Stock Exchange closed significantly higher on Monday, buoyed by hopes for a substantial de-escalation of the trade war between the United States and China following the announcement of a 90-day suspension of major tariffs that both nations had imposed on each other.
The CAC 40 index, the benchmark for the Paris stock market, rose by 1.37%, equating to a gain of 106.35 points, closing at 7,850.10 points.
Previously, it had ended on Friday with an increase of 0.64%, closing at 7,743.75 points.
On Monday, the United States and China revealed that they would suspend most prohibitive tariffs for a period of 90 days, marking a notable de-escalation in their ongoing trade conflict, which has disrupted global economic stability.
The suspension will see US tariffs on Chinese products reduced from 145% to 30%.
Conversely, China, which had retaliated with tariffs of 125% on American goods, will lower these rates to 10% during this period.
Market analysts expressed optimism regarding the potential for further trade agreements following last week’s trade deal between the United States and the United Kingdom.
Christopher Dembik, an investment strategy advisor, stated that the development provides a much-needed boost to the market, which is in search of favorable news.
However, the enthusiasm on the market remains cautious.
Investors are relieved by this temporary reprieve but maintain a wary outlook, mindful that history suggests that such truces can be reversed, especially given the contentious nature of US-China trade relations.
Martin Wolburg, Chief Economist at Generali AM, noted that previous trade agreements have had inconsistent compliance, particularly between the two countries.
The luxury sector, which has faced significant challenges due to the trade conflict, showed strong reactions to the news, with companies heavily exposed to both the US and Chinese markets seeing notable gains.
LVMH, the world's leading luxury goods conglomerate, experienced a surge of 7.01%, closing at 530.50 euros per share.
Kering also saw a notable increase of 5.86%, finishing at 188.34 euros per share.
Hermès, recently recognized as the industry’s top company by market valuation, rose by 3.51% to 2,539 euros per share.
Conversely, the defense sector experienced declines on Monday.
Following requests from Kyiv and its European allies for a complete and unconditional ceasefire of 30 days, which they claim is a prerequisite for direct peace negotiations with Russia, the defense needs are anticipated to lessen.
Andrea Tueni from Saxo Bank highlighted the impact of this news on defense stocks, noting that the perception of diminished defense needs has resulted in declines for major companies.
The Thales Group finished down by 2.96% at 239 euros per share, while Dassault Aviation saw a drop of 4.70%, closing at 299.80 euros per share.
The CAC 40 index, the benchmark for the Paris stock market, rose by 1.37%, equating to a gain of 106.35 points, closing at 7,850.10 points.
Previously, it had ended on Friday with an increase of 0.64%, closing at 7,743.75 points.
On Monday, the United States and China revealed that they would suspend most prohibitive tariffs for a period of 90 days, marking a notable de-escalation in their ongoing trade conflict, which has disrupted global economic stability.
The suspension will see US tariffs on Chinese products reduced from 145% to 30%.
Conversely, China, which had retaliated with tariffs of 125% on American goods, will lower these rates to 10% during this period.
Market analysts expressed optimism regarding the potential for further trade agreements following last week’s trade deal between the United States and the United Kingdom.
Christopher Dembik, an investment strategy advisor, stated that the development provides a much-needed boost to the market, which is in search of favorable news.
However, the enthusiasm on the market remains cautious.
Investors are relieved by this temporary reprieve but maintain a wary outlook, mindful that history suggests that such truces can be reversed, especially given the contentious nature of US-China trade relations.
Martin Wolburg, Chief Economist at Generali AM, noted that previous trade agreements have had inconsistent compliance, particularly between the two countries.
The luxury sector, which has faced significant challenges due to the trade conflict, showed strong reactions to the news, with companies heavily exposed to both the US and Chinese markets seeing notable gains.
LVMH, the world's leading luxury goods conglomerate, experienced a surge of 7.01%, closing at 530.50 euros per share.
Kering also saw a notable increase of 5.86%, finishing at 188.34 euros per share.
Hermès, recently recognized as the industry’s top company by market valuation, rose by 3.51% to 2,539 euros per share.
Conversely, the defense sector experienced declines on Monday.
Following requests from Kyiv and its European allies for a complete and unconditional ceasefire of 30 days, which they claim is a prerequisite for direct peace negotiations with Russia, the defense needs are anticipated to lessen.
Andrea Tueni from Saxo Bank highlighted the impact of this news on defense stocks, noting that the perception of diminished defense needs has resulted in declines for major companies.
The Thales Group finished down by 2.96% at 239 euros per share, while Dassault Aviation saw a drop of 4.70%, closing at 299.80 euros per share.
