Following its rebound of the previous day, the Paris Bourse is set to open slightly lower on Tuesday morning, as investors' fears about the political situation in France continue to dissipate.

At around 8:15 a.m., the future contract on the CAC 40 index - for delivery at the end of July - was down 17.7 points at 7560 points, heralding a start to the session in negative territory.

After gaining up to 2.8% yesterday morning, the Paris market saw its gains slowly eroded over the course of the session, finally ending the day with a gain of 1.1% at 7561 points.

Scalded by the results of the European elections at the beginning of June and the announcement of the dissolution of the French National Assembly, investors are beginning to calmly integrate the scenario of a paralysis of the political environment in France.

Victim of massive sell-offs since June 7, the CAC 40 is still down around 5.5%.

Christopher Dembik, Investment Strategy Consultant at Pictet AM, warns: "It is highly likely that the technical rebound seen yesterday will run out of steam, as there are no motors to sustain it.

"We think that the political risk in France will definitely take a back seat to the stock market - unless there is a surprise in the polls," he adds.

After the shock of the French vote, market participants will be hoping to regain their composure over the next few sessions, particularly as questions about the economic situation return to the forefront.

The market correction and the adjustment of valuations should shift the focus back to fundamentals, primarily inflation trends.

The inflation indicator for the eurozone for June - to be published at 11:00 a.m. - should confirm the recent slowdown in price rises observed in the region over the last few months.

Reassuring inflation figures could ease investors' concerns and encourage them to return to the equity markets.

German inflation figures, published on Tuesday, came in slightly above consensus, while moving closer to the ECB's 2% target, giving traders hope of pleasant surprises.

On the bond front, the spread between the yield on French 10-year OATs and German sovereign bonds (Bunds) narrowed to 75 basis points yesterday, signalling reduced risk aversion.

Professionals will also be counting on a promising crop of second-quarter results, starting next week, to bring market fundamentals back to the fore and restore the upward trend that has characterized stock markets since the beginning of the year.

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