US, WASHINGTON (NEWS OBSERVATORY) — After opening sharply lower, the fall in the CAC 40 is accentuated this afternoon, with a recent low at 4140 points, down more than 10% on the day.
Recall that the index has been displayed in red for each day since the start of the week, with a dip of -8.39% Monday, -1.51% Tuesday, and -0.57% Wednesday.
Today is also the 6th consecutive decline in the index.
With more hindsight, we also note that this is the third consecutive week of a drop in the CAC 40.
This week’s fall more than exceeds the fall of more than 12% in the week of February 24, which had been the worst week in the index since the 2008 financial crisis.
Since February 15, when the CAC 40 was trading around 6,100 points, to today’s trough, the fall has therefore exceeded 30%.
Remember that the coronavirus crisis has weighed heavily on all global equities for several weeks.
As for today’s fall, it is mainly due to Trump’s announcement last night of a travel ban from Europe to the United States to slow the spread of the coronavirus.
The decision of the Italian Prime Minister to close all shops in Italy, except food and pharmacy, also weighs on the morale of investors.
In the end, investors therefore begin to take full account of the extent of the decisions that could be taken by governments to combat the coronavirus pandemic.
This afternoon, disappointing announcements from the ECB, which did not lower its rates contrary to market expectations, reinforced the decline. The Central Bank has certainly announced a massive increase in QE and new TLTRO loans to banks, but that has not been enough to reassure the market, especially since the other central banks seem to be doing more, with the recent rate cuts 0.50% emergency response from the Fed and BoE.
The sharp decline in the opening of the US stock markets at 2:30 p.m. (the United States having switched to summer time) also weighed on the Paris index, the S&P 500 dropping 8%, while the Dow Jones lost 7.2%.
Finally, it should be noted that from a graphic point of view, there is no other support in view than the psychological threshold of 4000 points. Below, we find the June 2016 low at 3925 points, before the February 2016 low at 3890 points.
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Article is written and prepared by our foreign editors from different countries around the world – material edited and published by News Observatory staff in our US newsroom.