CAC 40 Closes Higher, but French Risk Premium Remains Steady

A Green Session Amid Bond Market Tensions

The trend was clearly upward throughout the day. Out of the 40 values in the index, 32 advanced and only 8 declined, indicating a market driven by a broad buying movement rather than just a few isolated leaders.

However, the climate remains influenced by pressure on government bonds. The yield on the 10-year OAT has stayed above 5% since October 21, reaching its highest level since 2002, while the yield spread between France and Germany peaked at around 171 basis points on October 22 before easing to 167.5 points at the end of the week. France is now borrowing at higher rates than Italy for this maturity, an unprecedented reversal in the hierarchy of sovereign risk premiums in the eurozone.

Moody's maintained France's rating at Aa3 with a negative outlook on October 23, despite some investors fearing a downgrade. The agency, however, highlighted high debt levels, around 120% of GDP, and a budget trajectory considered fragile in a fragmented Parliament.

Central Bank Decisions in the Background

This session marks the beginning of a busy week. The US Federal Reserve, the European Central Bank, the Bank of Japan, and the Bank of Canada are all set to announce their decisions between October 28 and 30, alongside the release of the US third-quarter GDP and the PCE inflation index.

The markets are largely expecting the Fed and the ECB to maintain the status quo, with the latter currently emphasizing the message that fiscal discipline must come from the member states. On Wall Street, the S&P 500 was up by 0.75% and the Nasdaq 100 by 1.29% during the session at the time of the Paris market close, while the Dow Jones gained 0.30%. In Europe, the day ended on a positive note all around, with the DAX up 0.91% and the FTSE 100 rising 0.72% at the close.

Stellantis and Luxury Lead, EssilorLuxottica Bucks the Trend

Leading the chart, Stellantis posted the best performance on the index with a gain of 3.91% at 3.69 euros. The luxury sector follows closely, with Hermès advancing 3.23% to 1,278.5 euros. Technology is also performing well: STMicroelectronics rose 2.62% to 40.5 euros, after announcing on Monday the launch of their first automotive sensors resulting from the acquisition of NXP's MEMS activities, a line of combined sensors intended for advanced safety and driver assistance functions. Financial and construction stocks complete the leading pack, with BNP Paribas (+2.43%) and Eiffage (+2.34%).

Conversely, EssilorLuxottica ended at the bottom with a fall of 3.42% to 175 euros, on a day when CIC Market Solutions confirmed its buy recommendation with a target price maintained at 210 euros. Publicis dropped 1.58% to 99.26 euros, followed by ArcelorMittal (-0.90%) and Euronext (-0.45%). Carrefour ended with a limited decline of 0.43% to 13.78 euros. A narrow table of declines, reflecting a session largely dominated by buyers.