CAC 40 Drops Sharply: Paris Stock Exchange Struggles Under Oil Pressure

A Paris Trading Session Influenced by Geopolitics

The downturn is broad and inescapable. European indices are all in the red: the DAX is down 1.52% and the STOXX 600 drops 1.43% during the session, while the FTSE 100 falls 1.10%. The SBF 120 declines by 1.75%.

The mood remains dominated by the energy issue. Brent is hovering around 100 dollars a barrel, amid the open conflict between the United States and Iran and attacks claimed by the Houthis against oil facilities in Saudi Arabia. The reduction of crude oil flows around the Strait of Hormuz is fueling a risk premium that keeps market jitters alive. Adding to this energy equation is the war in Ukraine, where the resumption of Russian strikes on Kyiv serves as a reminder of the lack of a diplomatic breakthrough despite the U.S. mediation attempt.

This geopolitical cocktail explains the grave tone in Paris, which is losing ground almost across the board.

TotalEnergies Stays Afloat, Defensive Stocks Hold Steady

In this tense context, oil benefits the energy sector. TotalEnergies leads the CAC 40 with an increase of 1.02% to 78.54 euros. The group also announced a series of agreements that bring the Papua LNG gas project closer to its final investment decision, with a transfer of the operator role to ExxonMobil and its stake reduced to 20%, while retaining its share of LNG volumes.

Beyond this stock, gains are limited to a few others. Dassault Systèmes rises by 0.98% and Engie increases by 0.56%. Business services groups Eurofins Scientific (+0.39%) and Bureau Veritas (+0.14%) round out a particularly narrow table of gains. Together, these five stocks comprise the entirety of the index's values that escape today's downturn.

Luxury and Tech Deep in the Red

At the bottom of the rankings are sensitive sectors. Capgemini records the largest drop in the CAC 40, falling 3.84% to 101.50 euros. In the luxury sector, Kering drops 3.58% to 235.65 euros, despite an HSBC note maintaining its buy recommendation while lowering its price target from 340 to 305 euros. LVMH, on the other hand, declines by 3.19% to 412.95 euros. The stock is subject to mixed opinions: HSBC downgraded its recommendation from « buy » to « hold, » while Grupo Santander upgraded it to « outperform » with a target set at 500 euros.

Industrial and construction stocks are also not spared: Saint-Gobain loses 3.44% to 71.84 euros, and Legrand falls 3.25% to 141.40 euros. The dispersion alone summarizes the session's landscape: by midday, only five of the index's stocks are gaining, while thirty-five are declining.