The Paris Bourse ended very sharply down 4.75% on Friday, a drop caused by the appearance of a new variant of Covid-19, which raises fears of new containment measures. The flagship CAC 40 index fell 336.14 points to 6,739.73 points, canceling all its gains since the beginning of the month. This is his worst session since March 18, 2020, when the first confinement was introduced in France.
World markets worried
Over the week, the Parisian rating lost 5.24%. Around the world, financial markets have bowed under the pressure of fears related to the appearance of a new variant, detected in South Africa. European countries, which are already facing a fifth wave of Covid-19 contamination, are starting to take action and the European Union on Friday recommended member states to suspend flights to and from southern Africa.
“There was already a new wave of Covid-19 in Europe, which has led some governments to take measures, and there this new variant could potentially add an additional dose of risk”, argues Florian Allain, portfolio manager at Mandarine Gestion , to explain the magnitude of the movements of the day.
A variant with the potential to spread very quickly
Now called B.1.1.529, this variant has the potential for very rapid spread, according to scientists, who do not know at this stage whether the vaccines currently available are effective against it. Countries like the UK, France or the Netherlands, have banned flights from South Africa and five neighboring countries as of midday Friday, while a case has been identified in Belgium, the first in Europe.
Florian Allain observes “exactly the same reactions as during the market trough of February 2020 when we discovered the Covid-19”, and notes that the actions of the sectors of transport, energy, insurance, and automobiles are sold while stocks linked to consumer goods are doing better. Oil prices, dependent on expectations of economic activity, also lost nearly 10%.
Investors preferred to fall back on the bond market, a traditional refuge in times of uncertainty, causing a sharp drop in yields. The US 10-year interest rate fell to 1.50% from 1.64% at the close the previous day. And the yield on French ten-year debt fell to 0.04%, down nearly 8 basis points.
Tourism toast
The titles of the airline companies, already tested by the pandemic, drank the cup with the first travel restrictions. The aircraft manufacturer Airbus collapsed 11.49% to 99.36 euros, Air France KLM 9.67% to 3.77 euros and Aéroports de Paris 8.61% to 104 euros.
More generally, the entire tourism sector has suffered. Accor lost 8.91% to 26.89 euros and Compagnie des Alpes 7.88% to 12.40 euros. The property Unibail-Rodamco-Westfield, owner of shopping centers, fell 11.88% to 58.46 euros, making it the red lantern of the CAC 40.
Only two actions ended up rising: the giant of analysis laboratories Eurofins Scientific, whose growth was driven by Covid-19 screening tests, soared 7.89% to 113.72 euros. For its part, Teleperformance (+ 0.68% to 357 euros) has resisted the general trend, tech generally taking advantage of containment measures. Dassault Systèmes has also declined by 0.41% to 52.89 euros.
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