France stocks significantly fell on Monday, indicating the dramatic crash on Wall Street on Friday. The CAC 40 index is trading at €6,423, more than a 2.50% drop, the lowest since March 10th and 13% from its lowest in 2022.

Emmanuel Macron wins

The CAC 40 index fell sharply regardless of Macron winning the Presidential elections. He defeated Marine Le Pen by 58% votes. The drop is due to a general concern about the Fed’s and ECB’s more hawkish hints.

Jerome Powell, the Fed chair, cautioned that the bank would continue to increase interest rates in subsequent months. Analysts predict a 0.50% increased rate in its May meeting, while some expect a 0.75% hike in June and July.

The ECB will like to increase rates later in the year. Christine Largarde, in a report, had a hawkish tone. Yet, there are worries that the bank’s high-interest rates will weigh in on the European economy amid a stagflation era.

The weakest stock performance in the CAC 40 index was ArcelorMittal, with more than an 8.2% drop. Luxury brands fell too by more than 4%, like Kering, Hermes International, Louis Vuitton, and L’oreal

Other droppers included Schneider Electric, TotalEnergies, Stellantis, and Societe Generale. Alternatively, companies which did well were Engie, Vinci, Eurofins Scientific, Bouygues, and Danone.

CAC 40 forecast

The daily chart shows that the CAC 40 index crashed to the important support level at €6,412, which was the lowest level since March. The index has crashed below the 50-day and 100-day exponential moving averages (EMA) while the Relative Strength Index (RSI) has been in a downward trend. Therefore, a move below €6,410 will mean that there are more sellers in the market. If this happens, the CAC index will likely keep falling as bears target the support at €6,200.

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