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CAC40 (FRA40) bounces higher after WTO ruling
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Luxury goods companies jump as US tariffs are seen less damaging than expected
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Airbus (AIR.FR) surges as US exempts jetliner parts from tariff list
Trading during Thursday’s European session is a bit muted as investors from Germany are off for the Unification Day holiday. However, it does not mean that today’s trading is any less interesting than usual. Yesterday’s WTO ruling and US response triggered significant price moves on the French stock market.
CAC40 (FRA40) reached a fresh all-time high earlier this week but disappointing ISM release and concerns over the condition of EU-US trade relationship caused the index to decline around 5% over the past two days. While the scale of decline may look worrying one should keep in mind that we are far from trend reversal. According to the Overbalance methodology, a bullish setup would be invalidated once the price breaks below the range of the largest correction (yellow rectangles). This threshold can be found more or less at the 5200 pts handle. Source: xStation5
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Create account Try a demo Download mobile app Download mobile appStocks from Food & Beverages sector can be found among top performers today. It is an aftermath of yesterday’s WTO ruling. WTO allowed the United States to impose duties on EU goods in response to years of illegal government aid to Airbus (AIR.FR). Such a ruling was expected and it was expected that different types of alcoholic drinks would be included on the tariff list. Indeed, it was announced that wine will be subject to tariff but other types of alcohol, like for example cognac or champagne, were exempted. Investors welcomed the decision and rushed to buy shares of companies selling spirits and other luxury goods. LVMH (MC.FR) and Pernod (RI.FR) can be found among CAC40 top gainers today.
Another company that experiences strong price moves today is the one that was at the centre of WTO ruling - Airbus (AIR.FR). The European planemaker advances today as US response seems to be quite “light”. While new airplanes were included in the tariff list, jetliner parts were not mentioned. It means that the company could export manufactured parts to United States and assembly them at its plant in Alabama. However, it remains to be seen whether the plant in Alabama can process whole Airbus’ US order backlog.
CAC40 members at 9:22 am BST. Source: xStation5
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