Despite Fitch’s unexpected downgrade of the nation’s credit outlook, French stocks made gains on Monday, buoyed by a significant decline in oil prices. This drop was attributed to alleviating supply concerns, fuelled by optimism surrounding ongoing discussions between Iranian officials and Qatari mediators that could lead to a favourable resolution.
Traders were responding to reports indicating that U.S. President Donald Trump seeks to extend diplomatic efforts with Iran prior to reinstating military actions. Brent crude front-month futures declined to $108.75 a barrel, representing a decrease of $4.68 or 4.13% from the previous close. Fitch has issued a warning regarding the deteriorating outlook for France’s debt, casting doubt on the nation’s capacity to sustainably rehabilitate its public finances following the presidential election in 2027. The benchmark CAC 40 increased by 28.43 points, reflecting a rise of 0.36%, reaching 7,997.85 shortly after noon.
- ArcelorMittal, Safran, Saint-Gobain, STMicroElectronics, BNP Paribas, Eiffage, Accor, and Pernod Ricard experienced gains ranging from 1.3% to 1.75%.
- Vinci, Airbus, Legrand, and Michelin experienced an increase of 1% to 1.15%.
- EssilorLuxottica, Eurofins Scientific, Danone, Bouygues, Unibail Rodamco, Publicis Groupe, Engie, L’Oreal, Hermes International, and Societe Generale experienced increases ranging from 0.4% to 0.9%.
- Euronext and TotalEnergies experienced declines of 1.3% and 1.2%, respectively. Renault, Carrefour, Capgemini, Stellantis, and Sanofi experienced declines ranging from 0.4% to 0.75%.
- Alstom shares experienced a significant decline of 31%. The French train manufacturer has adjusted its profit and cash flow projections for the second time since April, while also lowering its sales forecast for the 12 months ending in March to a range of 2% to 4%, down from an earlier estimate of approximately 5%.
In economic news, final data from S&P Global indicated that the S&P Global France Manufacturing PMI was adjusted marginally upward to 49.5 in October from the preliminary estimate of 49.3, yet it continued to fall short of September’s 50.6. The data indicated a renewed contraction in the country’s manufacturing activity, following two consecutive months of expansion, marking the steepest decline since July of the previous year.
