Paris (AFP)

The decline of the Paris Stock Exchange was accentuated Tuesday at midday (-1.76%), caution gaining ground before a two-day meeting of the Fed, against a background of profit taking.

At 13:26 (11:26 GMT), the CAC 40 index fell by 91.41 points to 5.084.11 points. The day before, it had finished down 0.43%, pausing after a week of exceptional growth.

The Parisian rating took a few steps in the green at the opening, spurred by the rise in the American markets the day before, before switching to red. The decline then gradually intensified.

Wall Street was preparing to open in retreat. The futures contract for the Dow Jones Industrial Average index fell by 1.03%, that of the broad S&P 500 index by 0.84% ​​and that of the highly technological Nasdaq by 0.43%.

"The stronger-than-expected decline in German industrial production in April and the further downward revision of the World Bank's growth forecast, which now expects the world economy to contract by 5.2% in 2020 ( the strongest since the immediate post-war period), fueled investor caution, "said Franklin Pichard, chief executive officer of Kiplink Finance.

The global economy is expected to contract by 5.2% this year due to the new coronavirus, unheard of since the Second World War. It is the number of countries that will find themselves in recession that makes this crisis the worst since the Great Depression of the 1870s, the World Bank said Monday evening.

In addition, "the markets are awaiting the conclusions" of the Fed's monetary policy committee tomorrow evening, said Tangi Le Liboux, a strategist for broker Aurel BGC.

- Quivering -

"If the job market recovers quickly, the Fed will find it difficult to justify the implementation of new support measures, but could also slow down the pace of its weekly liquidity injections," he added. judging that it was "perhaps in the interest of the Fed to calm the stock market euphoria in the short term".

The unemployment rate fell in May in the United States, falling to 13.3% when analysts saw it climb to almost 20%. The economy has been showing signs of a thrill for several weeks, even though it officially went into recession in February, according to the National Research Bureau's Economic Cycle Dating Committee.

The two-day meeting that begins this Tuesday for the US Federal Reserve is the first since the lifting of containment measures in the United States. It should once again stress the risks of the pandemic for the economy, despite this surprise drop in unemployment.

In terms of indicators, after the decline in industrial production on Monday, Germany released Tuesday its foreign trade figures marked by a 24% drop in exports in April.

The French economy, for its part, should plunge by around 10% this year, despite a "gradual" recovery in activity from the third quarter, according to an estimate by the Banque de France, which judges that the GDP will not recover its pre-crisis level before mid-2022.

In terms of values, investors were taking profits on the securities that have benefited the most in recent days from the rise in the rating.

Thus, the banking sector ebbed: Societe Generale lost 5.70% to 16.77 euros, Crédit Agricole 5.41% to 8.78 euros and BNP Paribas from 3.65% to 38.01 euros.

The automobile was also affected. Renault fell 3.04% to 25.56 euros and Peugeot 4.31% to 14.89 euros.

Europcar fell 5.06% to 2.36 euros after flying the day before by 21.01%.

© 2020 AFP