The flagship CAC 40 index gained 113 points to 7,333.01 points, its biggest gain since June 2. It recovered 3.11% on the week, offsetting the majority of its losses of the previous week (-3.89%).

The Parisian rating opened higher but the trend was significantly amplified in the second half of the session, after the publication of the US inflation indicator CPI.

Inflation slowed sharply again in June in the United States, to 3% year-on-year from 4% the previous month, and thus reached its lowest since March 2021.

"We have entered a period of normalization, with monthly price changes of around 0.2%," as in the pre-Covid period, notes Patrice Gautry, chief economist of the Union bancaire privée. "Excesses are decreasing, even in volatile sectors," such as new cars, or the price of airline tickets, he adds.

In other good news, core inflation, i.e. excluding food and energy prices, fell to 4.8% year-on-year from 5.3% the previous month, a slower pace than expected.

If inflation is still below the 2% pace targeted by the central bank, the trend will allow for more balanced debates on the institution's response to the situation, with more weight for members requesting a flexible position, according to Gautry.

Markets had experienced last week a "warning shot" by noting the Fed's determination on future rate hikes, describes the economist.

If a new rise in the key rate in July seems to be recorded in the head of the market, they consider it unlikely now that a second increase will be raised at the next meeting.

As a result, interest rates on government bonds have fallen sharply on the bond market. The rate for the French 10-year bond fell to 3.09%, from 3.21% on Tuesday.

Casino Speculation

The heavily indebted group Casino climbed 10.75% to 3.32 euros, investors rejoicing at the possibility that the two groups of contenders for the takeover of the brand increase their offer, according to Les Echos.

Rally also took 6.98% to 0.97 euros.

Dissonant notes

The semiconductor sector benefited from a recommendation from analysts at Jefferies: STMicroelectronics gained 4.68% to 46.49 euros, and Soitec 6.59% to 161.80 euros.

Conversely, Air-France-KLM fell 3.80% to 1.63 euros after Deutsche Bank analysts raised concerns about the ability of European airlines to keep ticket prices as high as they are now.

Thales to spend one billion euros on AeroComms

French technology group Thales said Wednesday it has entered into exclusive negotiations to acquire Cobham Aerospace Communications (AeroComms), a company providing safety communication systems for cockpits, for $1.1 billion.

The price of the acquisition is deemed "reasonable" in a note from Jefferies, the transaction being considered "positive" for the company.

Its share gained 3.01% to 137.10 euros.

© 2023 AFP