CAC 40 Dips as Middle East Worries Loom

Cac Futures

French stocks experienced a downward trend on Wednesday, influenced by the prevailing uncertainty surrounding the U.S.-Iran ceasefire. This uncertainty was exacerbated by Iran’s launch of ballistic missiles in the Gulf region and the subsequent U.S. response, which involved striking Qeshm Island. The Qeshm Island, which directly obstructs the entrance to the Strait of Hormuz, serves as the foundation for the IRGC’s network of subterranean facilities and defensive installations throughout the island.

Concerns regarding inflation, spurred by the significant increase in oil prices, also played a role in the market’s decline. Investors also analysed regional PMI data. Brent crude futures advanced to $98.99 a barrel, reflecting an increase of approximately 3%. The benchmark CAC 40, which declined to 8,161.84, was down 25.36 points or 0.31% at 8,183.73 nearly half an hour past noon.

  • Stellantis experienced a decline of approximately 3.4%.
  • Capgemini, Kering, Renault, Dassault Systemes, Airbus, Renault, Safran, and LVMH experienced declines ranging from 1.6% to 2%.
  • BNP Paribas, AXA, Schneider Electric, Legrand, Hermes International, and Bureau Veritas experienced a decline ranging from 1% to 1.4%.
  • Societe Generale and Unibail Rodamco also experienced a significant decline.
  • Air Liquide experienced an increase of 2.15%, while Veolia Environment saw a rise of nearly 2%.
  • Engie, TotalEnergies, Danone, STMicroelectronics, and Orange experienced significant upward movement.

Final survey data indicated that the euro area private sector experienced consecutive contractions in May, representing its most significant decline in 18 months. The final composite output index decreased to 48.5 in May, down from 48.8 in April. However, the score exceeded the flash estimate of 47.5. Overall activity levels in the private sector experienced a decline, primarily driven by the services sector, while manufacturing production continued to increase. The services Purchasing Managers’ Index recorded a value of 47.7, reflecting a modest increase from the previous month’s figure of 47.6. The flash reading registered at 46.4.

France’s private sector experienced its most significant decline since January 2024. The final composite PMI declined to a 28-month low of 44.9, down from 47.6 in the preceding month, yet it remained above the initial score of 43.5. The services PMI declined to 44.3 in May, down from 46.5 in April. The headline measure recorded its lowest reading in five-and-a-half years. The flash services PMI score registered at 42.9.