CAC 40 Continues to Rise Despite a Dip in Luxury Sector

Pernod Ricard and EssilorLuxottica Lead the Pack

Pernod Ricard stands out as the champion of the session with an increase of 2.61% to 85.56 euros, a remarkable performance given that the group reported a 7.6% drop in revenue for the first quarter this morning, slightly more pronounced than expected. This stock market paradox is explained by the reassuring message from management, which anticipates an improvement in trends starting in the second half, as the current year is described as a transition year. Investors seem to be betting on this favorable shift.

Close behind, EssilorLuxottica gains 2.37% to 276.60 euros, buoyed by anticipation of its third-quarter revenue report expected later in the evening. The Franco-Italian group also announced today the acquisition of Ikerian AG, specializing in artificial intelligence applied to eye health, thereby strengthening its strategy in medical technologies. This move reflects the optical giant's ambition to position itself in high-value-added segments. Edenred rounds out the top three with a rise of 1.94% to 20.49 euros, while Renault increases by 1.82% to 34.06 euros and Michelin by 1.76% to 26.66 euros, indicating renewed interest in French industrial stocks after yesterday's downturn.

French banks are regaining momentum

The French banking sector is also benefiting from the session, with Société Générale gaining 1.58% to reach €56.44, BNP Paribas advancing 1.18% to €77.74, and Crédit Agricole climbing 0.71% to €16.95. This upturn comes after several challenging weeks characterized by French political uncertainty. The rejection of the no-confidence motion against the government provides a much-needed element of 'relative' stability for these institutions, which are particularly sensitive to the national context. Their current low valuations, with a 25% discount compared to their European counterparts, present an additional incentive for investors seeking opportunities.

Following the financial stocks, other heavyweights are joining the upward movement. Thales is up 1.64% at €253.50, Stellantis increases 1.18% to €8.75 after last Tuesday's announcement of a massive $13 billion investment in the United States, and Safran rises 1.11% to €300, buoyed by quarterly results released last Friday that exceeded expectations with a 16.7% increase in revenue. Sanofi, Schneider Electric, Legrand, and Air Liquide also show gains ranging from 0.86% to 1.17%, indicating a fairly widespread buying trend across major French stocks.

Luxury consolidates after the previous day's surge

Contrary to the general trend, the luxury sector is taking a logical pause after the excitement generated yesterday by LVMH's excellent quarterly results. Kering posted the largest decline in the CAC 40, dropping 1.55% to 308.30 euros, impacted by Berenberg Bank's downgrade from Hold to Sell just today. The financial institution believes that the sector is facing a demand rather than a supply issue, with a decline in consumer aspirations and shrinking demand from China.

Hermès decreased by 0.69% to 2,160 euros, while LVMH itself, after surging more than 12% on Wednesday, only rose by 0.13% to 598.70 euros, signaling a natural consolidation following such a spike. L'Oréal limited its gain to 0.50% at 381.95 euros. These movements reflect a certain caution among investors regarding the sustainability of the sector's recovery, despite encouraging signals from China mentioned by LVMH in its results.

Among other notable declines, Euronext fell 0.63% to 126.30 euros in a move of profit-taking after several consecutive sessions of gains, while Bouygues dropped 0.41% and ArcelorMittal slipped 0.39%, indicating increased selectivity among investors within the Paris index.