The flagship CAC 40 index dropped 49.86 points to 7,074.02 points after a decline of 0.83%.

"We are going through a difficult week, without any real news", but it is also in this environment "that we can observe the behavior of the market", comments Florian Ielpo, in charge of macroeconomics at Lombard Odier IM.

"The market today is giving us a monetary policy anxiety attack," but "it was simply told that rates will remain where they are for an undetermined horizon," summarizes the economist.

The U.S. Federal Reserve (Fed) announced last Wednesday to keep rates in the range of 5.25\u5.50%, while anticipating a further hike by the end of the year, as well as rates slightly above 5.0% in 2024, a higher level than expected.

"Basically, the Fed has done nothing to explain the extent of the negative reaction of the markets," said Florian Ielpo, but faced with the surge in long-term rates on the bond market, both in the United States and in Europe, investors are worried about "the financing costs" of companies.

In the bond market on Tuesday, the yield on 10-year U.S. government bonds hit a new high of 4.56%, a first since October 2007; That of the 30-year maturity rose to 4.68%, a record since 2011.

In Europe, the interest rate on the ten-year German government bond reached 2.82%, also the highest since 2011 while its French equivalent was around 3.36%, at its highest level since January 2012.

However, when the "cost of financing increases, we invest less and less, we have less and less growth prospects and it is another dynamic that is taking place, the dynamics of the recession", details Florian Ielpo.

Worldline down

Payment specialist Worldline closed last in the flagship index on Tuesday by dropping 2.31% to 26.66% after the publication of a note from Oddo BHF indicating that after "contacting the company, we have made slight changes to our estimates (-0.3% for estimated 2023 revenue and -3% for estimated 2023-2024 earnings per share)".

Carmat pulsates

The French group, designer of an artificial heart, fell severely (-30.41% to 5.15 euros) after warning Monday, after the stock market seabce have financial visibility "until the end of October", being however "very confident" about its ability to inflate its cash flow and accelerate the pace of sales from the fourth quarter.

50 long-haul Airbus A350 aircraft ordered

The Franco-Dutch group Air France-KLM (-1.10% to 11.70 euros) will place a "major order" for 50 long-haul Airbus A350 aircraft to "continue the renewal and rationalization of its fleet" with more fuel-efficient aircraft emitting less CO2. Airbus gained some 0.50% to 123.58 euros.

© 2023 AFP