CAC 40 Declines Again in a Gloomy European Market

A Paris Square Under Budgetary Scrutiny

The mood remains heavy in Paris. Within the CAC 40, the imbalance is clear: nine stocks are rising, twenty-seven are falling, and four are holding steady. The decline in Paris is part of a broader European trend, with Germany's DAX dropping 0.93% and the STOXX 600 down 0.73% during the session. Meanwhile, London's FTSE 100 is down 0.74%.

France's political and budgetary situation remains at the forefront of concerns. Following the weekend's violence on the sidelines of demonstrations, investors are again questioning the government's ability to pass the 2027 budget. On Monday, the yield on the French ten-year bond reached 4.93% at the close, its highest level since July 2002, with a spread of 148 basis points compared to the German yield. However, a relaxation in French rates has begun to emerge this Tuesday morning. Attention is now turning to Moody's, which is set to review France's Aa3 sovereign rating, currently with a negative outlook, on Friday, October 23.

Sanofi and TotalEnergies Take the Lead

In this tense climate, the increases can be counted on one hand. Sanofi leads the CAC 40, rising by 1.63% to 72.17 euros. The laboratory announced the launch in Frankfurt of one of Europe's largest insulin plants, with full capacity production expected by 2032. The project received approval in September from the European Commission for public support provided by German authorities.
TotalEnergies follows with a gain of 0.76% to 81.14 euros, amid high oil prices: Brent crude is trading above 110 dollars against the backdrop of Middle Eastern tensions. CIC Market Solutions confirmed its buy rating, with an unchanged target price of 106.70 euros. Behind it, Kering advances by 0.56% and Danone by 0.40%. Euronext gains 0.30%, with JP Morgan having raised its target from 171 to 177 euros while maintaining a neutral position.

Schneider Electric and Electrical Stocks Under Pressure

Declines dominate the session. Schneider Electric drops 3.17% to 244.60 euros, leading the losses on the CAC 40. Two weeks after announcing its plan to acquire the American software company PTC, the group from Rueil-Malmaison has implemented an equity component of approximately 6 billion euros to finance the operation, without preferential subscription rights for existing shareholders. Following its lead, Legrand falls 3.12% to 127.20 euros.

The technology sector remains fragile: STMicroelectronics loses 3%, as questions about the profitability of massive investments in artificial intelligence continue to stir the sector in Europe. Eiffage retreats 2.42% to 96.78 euros, with Goldman Sachs lowering its target price from 148 to 127 euros while adopting a neutral stance. Banking stocks remain penalized by tensions over sovereign debt: Société Générale slips 2.33% to 60.82 euros, among the largest declines in the index.