Banks undermine the CAC

Worries over what the US regulators might do has seen banks weigh down the France 40. 

Following the successful attempts to fine a number of global financial institutions, it appears that the US regulators have now turned their attention towards the French bank BNP Paribas. Yesterday’s speculation was suggesting the bank could be in line for fines as much as $5 billion. If this happened the size of the fine may see the French bank reduce or suspend its dividend, and these worries have seen the bank fall a further 1.7% in today’s trading.

Deutsche bank’s cash injection from the Qatari royals highlights how desperate banks are to control their debt ratios with Basel requirements looming. 

The France 40 has shown volatility today, while at the same time remaining around its closing levels from yesterday. Much of this confusion can be attributed to tomorrows European elections, but also to the looming release of the French flash manufacturing and services purchasing managers index figures. So far 2014 has not been kind to economic data releases from France, and as yet there have been few reasons to believe this will change.

The 50-day moving average has offered the index some support but tomorrow’s economic data is likely to be the major driving force. Only the brave would expect these figures to outperform.

France 40 chart

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

Find articles by analysts