CAC 40 Gains as French Inflation Slows More Than Expected

CAC Futures News

French stocks made modest gains on Tuesday, as investors remained attentive to the latest developments concerning US-Iran peace talks and the European Central Bank’s annual Sintra Forum. Declining oil prices, evidence of a deceleration in inflation, and optimism regarding the ECB’s stance on interest rates in the near term are fostering a favourable sentiment in the market. ECB Chief Economist Philip Lane stated in Sintra, Portugal, today that the second-round effect from elevated energy prices is likely to take some time to manifest, and that policymakers will refrain from committing to a specific trajectory for interest rates during this period.

The benchmark CAC 40 increased by 41.94 points, reflecting a rise of 0.5%, reaching 8,409.27 just prior to noon.

  • Schneider Electric experienced an increase of approximately 2.9%. ArcelorMittal and STMicroelectronics experienced increases of 2.3% and 2.2%, respectively.
  • Legrand, Safran, and Saint-Gobain experienced increases of 1.8%, 1.7%, and 1.5%, respectively. Airbus, Michelin, Bouygues, Engie, and Bureau Veritas experienced gains ranging from 1% to 1.3%.
  • BNP Paribas, AXA, Societe Generale, Thales, Stellantis, and Accor recorded slight increases.
  • Kering experienced a decline of approximately 4.5%. Capgemini declined by 2.7%, whereas LVMH and Renault both experienced a decrease of approximately 1.5%.
  • Hermes International, Pernod Ricard, Publicis Groupe, Euronext, L’Oreal, and EssilorLuxottica experienced a moderate decline.

Data indicated that the annual inflation rate in France decelerated to 1.8% in June, down from 2.4% in May, and fell short of expectations, which were set at 2.1%, based on preliminary estimates. In June, the Consumer Price Index experienced a decrease of 0.2% compared to the prior month, marking the first decline in five months, primarily driven by a significant drop in energy prices.

In the context of the EU-harmonised Consumer Price Index, there was a year-on-year increase of 2% in prices, a decline from the 2.8% recorded in May, while month-on-month figures indicated a decrease of 0.3%. Producer prices in France increased by 0.3% on a month-on-month basis in May, following a decline of 2% in April.