French equities experienced a significant decline on Thursday morning, resulting in the benchmark CAC 40 reaching a two-week low. This downturn was driven by heightened tensions in the Middle East, which led to an increase in oil prices and subsequently raised concerns regarding inflation. Additionally, a hawkish stance from U.S. Federal Reserve Chair Jerome Powell regarding U.S. inflation contributed to the prevailing weak sentiment. Equities within the financial and luxury sectors are positioned as significant underperformers.
The CAC 40 experienced a decline of 142.05 points, reflecting a decrease of 1.78%, settling at 7,827.83 shortly before noon. In the wake of Iran’s assaults on energy infrastructure in the Middle East, notably the vital South Pars gas field, Brent crude futures experienced a significant increase, surpassing $119.00 per barrel earlier in the day. Although there was a slight decline to $114.50, the price remains elevated, reflecting an increase of nearly 6.5% compared to the previous close.
Following the decision to maintain interest rates, Powell remarked during his post-meeting press conference on Wednesday that the U.S. is experiencing ‘some progress on inflation’ but ‘not as much as we had hoped.’ Powell cautioned that ‘you won’t see the rate cut’ unless there is additional advancement on inflation, given the overarching uncertainty associated with the Middle East conflict and President Trump’s tariffs. Among the constituents of the benchmark index, only TotalEnergies (2.35%) and Sanofi (0.65%) are currently exhibiting positive performance. Accor is experiencing a decline of nearly 10% following the announcement from U.S.-based short seller Grizzly Research, which disclosed its short position in the stock and raised concerns regarding insufficient safeguards related to bookings.
ArcelorMittal has experienced a decline of 6.5%. Societe Generale, Schneider Electric, STMicroelectronics, Kering, BNP Paribas, Stellantis, Saint Gobain, and Airbus have experienced declines in the range of 3% to 4%. Legrand has experienced a decline of nearly 3%. Michelin, Hermes International, Renault, Credit Agricole, Safran, Bouygues, L’Oreal, Bureau Veritas, Eiffage, Unibail Rodamco, EssilorLuxottica, Eurofins Scientific, Veolia Environment, Capgemini and Carrefour are experiencing declines ranging from 1.7% to 2.8%.