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The CAC 40 made something of a recovery this morning, having started the week 0.7% down on Friday’s close. However, it has failed to reach breakeven at any point and is currently still 0.46% down after taking a fresh dip since the early afternoon. With the lead-up to Donald Trump officially taking on the U.S. Presidency now out of the way markets are now looking to concrete policy statements and moves. A flurry of activity is expected over the first 100 days of Trump’s administration with European and major Asian indices particularly interested in how seemingly ‘protectionist’ statements on global trade relations will manifest in reality. As Alan Gayle, director of asset allocation for RidgeWorth investments, put it, as quoted by the FT over the weekend:
“This is where expectations meet reality”.
Worries over whether threats to increase considerably import duties on goods manufactured outside of the U.S. will become reality is proving to be one of the main factors contributing to the recent pause in the ‘Trump Rally’ evident since his shock November election. Details on the huge public infrastructure spending promised during his election campaign are also being keenly awaited. This, along with the prospect of deregulation, particularly within the finance sector, was one of the main catalysts behind the boom in global equities markets over the past few months. Market participants will now want to see concrete progress on both fronts if they are not to decide optimism was over-egged.
The CAC 40’s banks are enduring a tough Monday to kick off the week. Societe Generale is down 1.93% so far today, BNP Paribas 1.18% and Credit Agricole 1.69%. Insurer AXA is down 0.84%. The day’s biggest fall, however, has been recorded by Nokia, which is down 2.36%. The telecoms hardware company returned to the smartphone market last week with its Nokia 6 model, currently only available in China. A pre-release flash sale, rumours put numbers at around 100,000 devices, apparently saw all available units sold instantly.
TechnipFMC, which made its debut on the CAC 40 last week after former constituent Technip, merged with U.S. peer FMC, is down 1.58%. The offshore engineering project manager has been slipping since its debut last Tuesday as the market decides what it is comfortable with as an initial valuation. The other significant faller today is lense maker Essilor International, down 1.72%. The company’s share price spiked last Monday on news of a merger with Italian eyewear specialist Luxottica, owner of the Ray-Ban brand. The merger is very much still on but Essilor’s share price has been steadily downtrending since that initial 10%+ gain on the news. Over 50% of gains are still being held onto.
In gainers, beverage brands holding Pernod Ricard is up 1.5%. The company last week announced a 10.5 million investment into its Irish whiskey distillery in Cork. The distillery, where brands such as Jameson’s are manufactured, will see its capacity increase by around a third. Construction group Vinci is the day’s biggest gainer, up 2.41%. Europe’s largest concessions and construction group will submit a bid to build Mumbai’s new airport. Vinci owns concessions to operate 35 airports globally and the bid for Mumbai is being made in association with Tata. Veola Environnement is the other company with a notable gain, up 1.78%.
