French Stocks on Wobbly Ground: Can the CAC 40 Find Its Footing?

The French equity market is turning in mixed signals today, with the CAC 40 index barely holding ground at 8,078.61, up just 0.05% as of midday. While some sectors are showing life, others are cooling off fast—a classic case of market indecision in turn.

The Bright Spots: Who’s Leading

On the upside, Stellantis is commanding attention with a solid 7.8% surge, followed by STMicroElectronics climbing 4.5% and Airbus gaining 3.5% after reaffirming its FY25 adjusted EBIT guidance. These three are in turn providing some much-needed support to the broader index. Secondary gainers like Thales, Safran, Engie, Veolia Environment, Bureau Veritas, and TotalEnergies are chipping in modest gains of 0.6% to 1.3%.

The Pressure Points: Weakness Persists

Meanwhile, luxury and tech names are feeling the heat. LVMH, L’Oreal, Kering, and Euronext are sliding 1% to 1.6%, with Capgemini, Dassault Systemes, and Vinci also posting losses. The selloff in turn has dragged down other heavyweights like Sanofi, Hermes International, ArcelorMittal, and AXA, which shed 0.5% to 1%.

The Economic Reality Check

Behind the volatility lies a complex economic picture. France’s HCOB Composite PMI came in at 50.4 for November—revised higher than the initial flash of 49.9 and a clear improvement from October’s 47.7. The Services PMI jumped to 51.4, reaching over a one-year high, which in turn signals renewed demand in that sector.

Manufacturing, however, tells a different story. Activity contracted for the third consecutive month with a PMI reading of 47.8, down from 48.8 in October. The sector remains under pressure despite hopes for recovery.

Eurozone’s Strength Offers Some Comfort

Looking beyond France, the broader Eurozone is posting its strongest growth since May 2023. The HCOB final Composite Output Index climbed to 52.8 in November from 52.5 previously, beating the flash estimate of 52.4. Services Purchasing Managers’ Index advanced to 53.6 from 53.0, showing robust momentum in turn across the service economy.

Factory output growth, however, has moderated to a nine-month low, echoing the weakness seen in France. The divergence between services and manufacturing suggests uneven economic momentum heading into year-end.

The Bottom Line

The CAC 40’s muted performance reflects the broader struggle between sector-specific strength and persistent manufacturing headwinds. With U.S. data still to come, investors are staying cautious—and rightfully so.