CAC 40 Slides On Inflation Concerns

French stocks fell slightly on Wednesday as concerns intensified about inflation.

A new poll released Tuesday showed a substantive majority of Americans are “somewhat concerned” about inflation, with four out of 10 people saying they believe the government might not be able to rein it in.

On Tuesday, Fed Chair Jerome Powell said the price increases seen in the economy recently are bigger than expected but reiterated that they will likely wane.

Some European Central Bank officials have warned of upside risks to the inflation outlook after agreeing to keep monetary stimulus.

Meanwhile, France’s private sector grew at the fastest pace in almost a year in June, flash survey results from IHS Markit showed earlier today.

The composite output index rose marginally to 57.1 in June from 57.0 in May.

This was the highest score since last July as the easing of lockdown restrictions helped drive the sharpest rise in service sector activity since April 2018.

The services Purchasing Managers’ Index advanced to 57.4 from 56.6 a month ago, while the manufacturing PMI fell more-than-expected to 58.6 from 59.4 in the previous month.

The benchmark CAC 40 dropped 21 points, or 0.3 percent, to 6,590 after closing 0.1 percent higher in the previous session.

Pernod Ricard shares rallied 2.7 percent after the drinks group raised its annual profit guidance, citing a stronger-than-expected recovery with the removal of COVID-19 curbs.

Luxury-goods group LVMH Moët Hennessy Louis Vuitton fell 1.6 percent on the back of a ratings downgrade from HSBC. Hermes lost 2.3 percent and Kering gave up 2.8 percent.