CAC 40 Ends Slightly Lower as Michelin Plummets Amid Target Revision
The Paris Stock Exchange closed with a slight decline on Tuesday, October 14, with the CAC 40 index dropping 0.18% to 7,919 points. This occurred amidst ongoing US-China trade tensions and a policy speech that temporarily boosted financial stocks. The session was marked by a strong sectoral split: while banks and construction groups benefited from a political lull, industrial stocks, particularly in the automotive sector, suffered significant losses. Michelin plummeted nearly 9% after revising its annual forecasts downward, while Stellantis continued its slide that began late last week. In contrast, Société Générale recorded the best performance of the day, driven by optimism following the quarterly results of major US banks.
Banking and Construction Stocks Hold Their Own
Société Générale emerged as the driving force of the CAC 40, rising by 2.42% to 55.02 euros, benefiting from a ripple effect created by strong earnings reports from major US banks. Citigroup, Goldman Sachs, and JPMorgan reported increased profits in the third quarter, supported by robust performance in equity trading and investment banking. This upswing across the Atlantic has renewed investor confidence in the European financial sector, especially as political instability concerns in France temporarily subsided following Prime Minister Sébastien Lecornu's speech.
The construction sector also shone, with Vinci gaining 1.83% to 119.45 euros and Bouygues climbing 1.41% to 38.72 euros. These companies benefited from the improved political climate after the announcement of the pension reform suspension and the presentation of preliminary outlines for the 2026 budget, thus dispelling fears of a government collapse and potential dissolution. AXA also stood out with a rise of 1.70% to 40.18 euros, reinforcing the financial sector's rebound. Defensive stocks like Edenred and Veolia rounded out the list of gainers, each increasing by 1.07%, reflecting a search for safe-haven assets in a tense geopolitical context.
Auto Industry Heavily Impacted by Economic Concerns
Conversely, Michelin recorded the largest drop in the CAC 40, plummeting 8.93% to 26.11 euros after lowering its annual forecasts. The tire manufacturer cited a further deterioration in the economic environment compared to July estimates, revising its sector operating profit to between 2.6 and 3 billion euros, down from the previously anticipated 3.4 billion. North American operations were particularly affected, with sales volumes dropping nearly 10% in the third quarter. The group's competitiveness was also impacted by unfavorable changes in tariffs and the dollar exchange rate, affecting free cash flow, now expected to be between 1.5 and 1.8 billion euros.
Stellantis fell 4.89% to 8.37 euros, continuing a downward trend that began late last week. Renault also suffered a decline, dropping 2.15% to 33.63 euros, amid widespread concerns about the European automotive sector. The entire industry is struggling with competition from Chinese electric vehicles, inadequate infrastructure, and the forced energy transition, while the impending 2035 ban on combustion engines continues to create uncertainty among consumers and investors.
Luxury and Communications Show Mixed Performance
The luxury sector experienced a mixed session despite the release of LVMH's third-quarter results. The luxury giant fell by 1.41% to 532.80 euros, even though it reported an organic growth of 1% for the July-September period, indicating a sequential improvement compared to the second quarter, where sales had dropped by 4%. This performance, which exceeded analysts’ expectations, was not enough to convince investors, likely due to profit-taking after several sessions of gains.
Meanwhile, Kering lost 1.60% to 298.90 euros, still affected by the structural crisis the group is facing, with sales plunging by 15% in the first half and a net income decrease of 46%. The flagship brand Gucci continues to struggle with sales down by 25%. In the communications sector, Publicis edged down by 1.75% to 82.04 euros, despite posting solid quarterly results with an organic growth of 5.7% and upgrading its annual targets. This decline illustrates the classic phenomenon of profit-taking after earnings announcements, likely because investors had anticipated these positive developments. The communication group has nonetheless confirmed that it is now targeting organic growth in the range of 5.0% to 5.5% for the entire year 2025.
This content has been automatically translated using artificial intelligence. While we strive for accuracy, some nuances may differ from the original French version.
