CAC drifts lower on market negativity

French government's intervention over BNP Paribas’ possible US fine dominates the headlines.

Although not one of the equities driving the France 40 today, it is one of the more important issues surround French companies. What will BNP Paribas be fined by US regulators?

Over the last week more and more leaks have appeared over the size of fine the company may receive, and at present it is up to a possible $10 billion in total. These fines relate to the banks activities in dealing with Sudan, Iran and Syria between 2002-2009. One thing that is not in doubt is the guilt of the French bank.

The G7 (not G8 no Russia) is currently taking place in Brussels today, and due to French public and political pressure Francoise Hollande will no doubt be taking the opportunity to bend the ear of President Obama.

Also moving in the CAC is Lafarge, as market speculation increases that it was set to become the subject of a takeover. Although not confirmed, it is rumored that CVC and KKR & Co are considering a $6.8 billion offer for some of the firm’s assets.

The CAC intraday lows have bounced off the 50-day moving average as markets wait to see if any stimulus package appears in tomorrow’s European Central Bank statement. Closing below this would cause me to re-asses the equity market’s ability to continue higher.

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