Stock

CAC 40 index crashes as luxury brands like Hermes sink

France stocks crashed hard on Monday, mirroring the spectacular Wall Street crash on Friday. The CAC 40 index fell by more than 2.50%, the worst daily drop in months. It has dropped to a low of €6,423, which was the lowest level since March 10th. The index has crashed by more than 13% from its highest level this year.

Emmanuel Macron wins

The CAC 40 index declined sharply even after Emmanuel Macron won the French presidential election. He managed to beat Marine Le Pen after winning about 58% of the election. The decline is likely because of the overall fears that the Federal Reserve and the European Central Bank (ECB) will embrace a more hawkish tone. 

Last week, Jerome Powell, the Federal Reserve chair, warned that the bank will keep raising interest rates in the coming month. Analysts expect that the bank will hike rates by 0.50% in its meeting in May. Some analysts also believe that the bank will deliver 0.75% hikes in June and July. 

The ECB is also expected to start hiking interest rates later this year. In a statement, Christine Lagarde hinted that this will happen. However, there are concerns that the bank’s high-interest rates will drag the European economy as it goes through a period of stagflation. 

The worst performing stock in the CAC 40 index was ArcelorMittal, whose shares declined by more than 8.2%. Luxury brands were also among the worst performers. For example, Kering, Hermes International, Louis Vuitton, and L’Oreal crashed by more than 4%. 

Other laggards in the CAC 40 index that crashed were Schneider Electric, TotalEnergies, Stellantis, and Societe Generale crashed.

On the other hand, the only companies in the green were Engie, Vinci, Eurofins Scientific, Bouygues, and Danone. 

CAC 40 forecast

The daily chart shows that the CAC 40 index crashed to the important support level at €6,412, which was the lowest level since March. The index has crashed below the 50-day and 100-day exponential moving averages (EMA) while the Relative Strength Index (RSI) has been in a downward trend. Therefore, a move below €6,410 will mean that there are more sellers in the market. If this happens, the CAC index will likely keep falling as bears target the support at €6,200.

The post CAC 40 index crashes as luxury brands like Hermes sink appeared first on Invezz.

Disclaimer: MonopolyWinnersUpdates.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 MonopolyWinnersUpdates.com. All Rights Reserved.

To Top