The flagship CAC 40 index fell 19.88 points, ending at 7,294.17 points. The day before, it had dropped 1.01% ending at 7,314.05 points.

"Expectations of a strong and sustained post-Covid rebound at the start of the year have given way to fears that China's economy will slow sharply," said Michael Hewson of CMC Markets.

To boost troubled growth in the world's second-largest economy, China's central bank cut two benchmark rates on Tuesday, after several similar measures in recent weeks.

Closely followed by the markets, these two rates are now at their lowest ever. They were last reduced in August 2022.

But this decision is seen as the opposite of the world's major economies that are raising rates to curb inflation.

And "this concern about the economic outlook has today led to a decline" in the CAC 40 in particular, weighed down "by sectors exposed to China such as luxury".

LVMH ended down 0.87% to 846 euros, Hermès dropped 0.53% to 1,950.20 euros and Kering 0.64% to 515.50 euros.

Renault closes the march

The board of directors of French carmaker Renault on Monday handed its chief executive Luca de Meo the reins of its new electric subsidiary, Ampere.

The future CEO of Ampere will have to "ensure the launch of the company and the success of its IPO project, while maintaining his current responsibilities as CEO of Renault," the group said in a statement.

Renault's share value fell 3.76% to 35.50 euros.

Airbus

Airbus (+0.41% to 132.02 euros) and the Franco-Italian manufacturer of electronic components STMicroelectronics (0.97% to 44.57 euros) announced Tuesday a partnership to develop semiconductors for electronic systems requiring high power, in order to progress in the electrification of aircraft.

The electrification of aircraft could allow savings of up to 5% in fuel, recalled the technical director of Airbus at a press conference.

Saffron budding

Safran took 0.10% to 143.04 euros after winning its first export contract for its Patroller drone by selling four copies to the Greek army as part of the modernization of its tactical drone systems, the group announced Tuesday at the Paris Air Show.

ADP returns to pre-Covid levels

Traffic at Paris airports continued to recover in May, returning almost to its pre-Covid-19 level, according to figures published on Monday. Its share price ended up 0.51% to 137.10 euros.

Neoen, the wind in its sails

The renewable energy producer closed up 4.33% to 30.38 euros after announcing that it revised upwards its profitability target for the 2025 financial year, with an adjusted EBITDA that exceeds 700 million euros and no longer "above 600 million euros" after a contract won in Australia.

© 2023 AFP