The flagship index lost 111.05 points to close at 7,098.70 points. The day before, it had fallen 94.06 points, finishing at 7,209.75 points.

Over the month of May, the Paris Stock Exchange lost 5.24%.

This month, it not only signs its first monthly balance sheet in decline since the beginning of the year, but also the worst since September 2022, at a time when investors feared that rate hikes by central banks would push the economy into recession.

There are currently many tensions for the markets. "The economic recovery in China is not as strong as hoped and there are fears about the agreement on US debt," said Arnaud Morvillez, portfolio manager at Uzès Gestion.

Manufacturing activity in China fell in May for the second straight month, according to data released Wednesday, while analysts expected an increase. The indicator of activity in services also fell in May in the country, confirming a much more difficult economic recovery than expected.

"Obviously fears about the extent of the rebound of the Chinese economy have an impact on the luxury sector in particular and we saw an underperforming CAC 40 today (Wednesday), but we must note however profit taking on these stocks," said the analyst.

As on other global stock market indices, luxury groups were struggling in Paris: LVMH lost 2.64% to 813.90 euros, Kering 2.91% to 498.35 euros and Hermès 2.64% to 1,901.80 euros. On the cosmetics side, L'Oréal gave up 1.29% to 399 euros.

As for the "fears about the default of the American debt, which would be the black scenario", Arnaud Morvillez believes that as long as the situation is not clearer, "the market will not progress".

A draft agreement was sealed Saturday between the White House and House Speaker Kevin McCarthy to raise the U.S. debt ceiling. After approval in committee on Tuesday evening, the text now awaits the green light Wednesday evening from the House, whose vote is scheduled around 00:30 GMT.

The Senate, narrowly dominated by the Democrats, will then have to pass the text before Monday, when, according to Treasury Secretary Janet Yellen, the United States could run out of cash if the ability to borrow is not restored.

In the bond market, interest rates on the France eased, the rate for the 10-year bond stood at 2.84% against 2.90% at the close.

Capgemini takes off

In a bear market, the French IT group Capgemini climbed 6.82% in Paris, to 162.80 euros, after announcing to extend its partnership in the field of artificial intelligence (AI) and data analysis with Google Cloud. AI is considered by many investors to be an extremely buoyant market.

© 2023 AFP