France’s CAC 40 index continues to trade near record highs even though the country has announced tighter Covid restrictions amid concerns over the Omicron variant.
France recorded more than 100,000 new infections on Saturday, which represents the highest number since the pandemic began.
Studies showed that Omicron might produce milder symptoms, but we will need more time to understand the new variant and have a clearer picture of how it may affect global growth.
There are fears that the rising number of cases could overwhelm hospitals, and because of this, France’s prime minister Jean Castex said that remote working would become compulsory for those who can.
From 3 January, all public gatherings will be limited to 2,000 people for indoor events, while outdoor public gatherings will be limited to 5,000 people. French Prime Minister Jean Castex added:
Nightclubs will remain closed until further notice, and cafés and bars will be able to provide table service only. Mask-wearing will become compulsory in city centers, and employees who work from home will have to do so at least three days a week.
France’s vaccine pass will come into effect from mid-January if parliament approves a draft bill, and according to plan, everybody should have proof of vaccination, not just a negative test, to enter public spaces.
The situation is not better in other European countries; additional restrictions were announced in Germany, while England and Scotland reported record cases over Christmas.
On the other side, inflation had spread more than previously expected in the Eurozone, and the risk of persistent inflation has risen.
The new strain also complicates the outlook for how aggressively the European Central Bank would normalize monetary policy to fight inflation.
French Finance Minister Bruno Le Maire said that the French economy is “doing well” thanks to a rise in consumer spending; still, the new covid measures could negatively influence the economy.
The upside potential remains limited
Data source: tradingview.com
France’s CAC 40 index advanced this Tuesday to 7,187 points for the first time in history, and if the price jumps above 7,200 points, the next target could be at 7,250 points.
The current support stands at 7,000 points, and if the price falls below this level, it would be a strong “sell” signal, and the next target could be around 6,700 points.
Summary
France’s CAC 40 index advanced this Tuesday to 7,187 points for the first time in history despite the fact the country has announced tighter Covid restrictions amid concerns over the Omicron variant. The new covid measures could negatively influence the France economy, and the upside potential remains limited for CAC 40 index.
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