CAC 40 Falls Below 8,000 Points as Hormuz Pressures Market, Defense Holds Strong

A Market Under Pressure, Weighed Down by Geopolitical Risk

The Paris Stock Exchange is navigating troubled waters at the end of this week. The CAC 40 has dropped nearly 1%, falling below 8,000 points by midday. The atmosphere remains tense due to the military escalation involving the United States, Israel, and Iran, particularly the unprecedented blockade of the Strait of Hormuz by the Iranian Revolutionary Guards. This strategic chokepoint, through which approximately 20% of the world's oil and an equivalent share of LNG flows transit, has never been closed in modern history, not even during the Gulf Wars.

Brent crude, which has surged nearly 16% in a week to reach $85, continues to influence arbitrage decisions on the Paris stock market. The dispersion of stock values is telling: only 11 components of the CAC 40 manage to show a gain, while 27 are down, and 2 remain flat. The overall mood is that of a nervous market seeking clarity on the Middle East crisis's progression.

Defense and Oil: The Few Survivors of a Tough Session

In this challenging environment, defense and energy stocks are managing to stand out. Thales leads the gains on the CAC 40, increasing by 1.65% to €240.30. Safran follows with a rise of 1.07% to €319.70. Both defense and aerospace manufacturers are benefiting from renewed interest as military spending remains a key focus in international affairs.

TotalEnergies is up 0.75% to €67.27, driven by rising crude prices. The oil company is among the few major stocks trading in positive territory this Friday.

Among other notable gains, Publicis is up 0.79% to €76.40, and Kering advances by 0.70% to €259.75, without any specific catalyst identified by midday.

Construction, Semiconductors, and Telecom: Red Dominates

The bottom of the chart is more crowded. Eiffage drops 3.02% to 133.35 euros, marking the biggest decline in the index.

STMicroelectronics falls sharply by 2.94% to 27.76 euros. The semiconductor manufacturer endures another tough session amid a European-wide pressure on the tech sector.

Bouygues slips 2.55% to 48.23 euros, following the general downturn in the construction sector. EssilorLuxottica decreases by 2.08% to 211.40 euros.

Orange declines 2.05% to 17.20 euros, despite receiving a positive signal in the morning: UBS initiated a buy recommendation for the stock with a price target set at 21 euros. The market, for now, does not share the Swiss bank's optimism. The telecom giant's stock remains caught in the general selling trend that characterizes this end-of-week session, dominated by geopolitical uncertainty in the Middle East.