CAC 40 Rises Almost 2% on Middle East Peace Hopes

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France’s equity benchmark CAC 40 experienced a notable increase on Wednesday, marking its third consecutive session of gains, fueled by optimism surrounding a potential de-escalation in the conflict in the Middle East. U.S. President Donald Trump stated his intention to conclude the Iran war without reactivating the Strait of Hormuz, particularly as the situation appeared poised to extend beyond his original four-to-six-week estimate. Trump stated that the U.S. could conclude its military operations in Iran within the next three weeks, asserting that Washington had already met its primary goals of undermining Iran’s nuclear aspirations and facilitating a change in the regime.

Meanwhile, Iran indicated that no formal peace negotiations were in progress but expressed a readiness to cease hostilities and conclude the ongoing conflict, contingent upon receiving credible assurances that the attacks will not recur. The CAC 40 reached 8,006.47, marking a high not seen in over two months, reflecting an increase of 151.00 points or 1.93% at 7,967.94 just moments ago.

  • Societe Generale, BNP Paribas, and Credit Agricole experienced increases of 5.4%, 4.3%, and 3.6%, respectively.
  • Thales experienced an increase of 5.2%. ArcelorMittal experienced an increase of 4.7%.
  • Eurofins Scientific, Legrand, Stellantis, Renault, and Unibail Rodamco saw gains ranging from 3% to 4.5%.
  • Schneider Electric, Accor, Eiffage, Saint Gobain, Safran, STMicroelectronics, Kering, Michelin, Airbus, AXA, Bouygues, Vinci, Engie, Veolia Environment, Dassault Systemes, L’Oreal, Bureau Veritas, and Euronext experienced an increase ranging from 1.2% to 2.8%.
  • Among the underperformers, EssilorLuxottica experienced a decline of 2.5%, while TotalEnergies fell by 1.7%. Pernod Ricard and Danone experienced slight declines in their financial performance.

The French manufacturing sector experienced stagnation in March, as production fell after consecutive months of growth. Additionally, new orders saw a significant decline, with clients postponing or cancelling their orders due to uncertainties stemming from the Iran war. The final factory PMI decreased slightly to 50.0, down from 50.1 in February. The flash score registered at 50.2. The euro area manufacturing sector experienced its most rapid expansion since mid-2022 in March, propelled by rises in production and new orders. However, the conflict in the Middle East has disrupted global logistics and heightened price pressures.

The final manufacturing Purchasing Managers’ Index increased to a 45-month high of 51.6 in March, up from 50.8 in February, and stayed moderately above the flash estimate of 51.4. Data indicated a modest increase in the unemployment rate within the euro area for February. The unemployment rate increased to 6.2% in January, up from 6.1% previously. During the corresponding period of the previous year, the unemployment rate stood at 6.3%. Forecasts indicated that the rate would hold steady at 6.1% in February. In the European Union, the unemployment rate remained unchanged at 5.9% in February. Meanwhile, the youth unemployment rate experienced a modest increase, rising to 15.3% from 15.2% a month prior.