What’s happening: French stocks rose on Tuesday, extending gains for the second consecutive indices trading session.
What happened: Expectations of additional stimulus and hopes of the global economy recovering overshadowed concerns over new covid-19 cases in Beijing and rising infections in some US states to send the French CAC 40 higher on Wednesday.
French President Emmanuel Macron’s announcement related to helping the country’s medical research also lifted the market sentiment.
After recording gains of 2.7% on Tuesday, the French index extended its rally yesterday.
Why it matters: Investors shrugged off worries of rising covid-19 infection rates in some states of the US and a new outbreak in Beijing. In an attempt to curb the spread of the virus, China cancelled some domestic flights and raised the alert level, resulting in the cancellation of classes and expansion of lockdowns in certain areas.
Investor also dismissed concerns of rising tensions between China and India near the border area and frictions between North and South Korea.
News of a widely available steroid, dexamethasone, proving helpful in saving lives of some critically unwell coronavirus patients also cheered the markets and boosted forex and stock trading.
Leading French drug-maker Sanofi said it is working on two potential vaccines for covid-19 and announced plans to invest €610 million to turn its two French facilities for research and development of these vaccines.
Meanwhile, the French President pledged €200 million for research and development of vaccines and said the plans for reopening some pharmaceutical production facilities in the country will be disclosed on Thursday.
Reports of the Trump administration preparing for a nearly $1 trillion infrastructure plan provided support to market sentiment yesterday.
At the close of trading in Paris, the French CAC 40 index had risen 0.88%, while the SBF 120 index gained 0.71%. The CAC 40 VIX, the index measuring the implied volatility of index options, lost 2.64% to settle at 33.22.
Worldline SA was the best performer of the CAC 40 index, rising 4.4% on Wednesday. Renault SA bucked the overall market trend, falling 3.7% in previous session.
What to watch: Investors look forward to the French President’s plans of reopening pharma companies. Markets will also keep an eye on the European Council, which is expected to meet at the end of the week, to discuss a proposal for the economy’s recovery.
Investors continue to monitor covid-19 cases around the world. The total number of cases has surged past 8 million globally, with France reporting around 194,805 infections.