CAC 40 Hovers Around Balance by Late Afternoon Ahead of the Holidays

Cyclical and automotive stocks boost the Paris market

Within the CAC 40, cyclical stocks have stood out particularly at the end of this pre-Christmas week. Accor leads the way with a jump of 1.95% to 48.06 euros, followed by aerospace group Safran, which rises 1.63% to 306.30 euros. Renault advances by 1.65% to 36.28 euros, benefiting from the upgrade of its credit rating to BBB- by S&P Global, with a stable outlook. This rating improvement reflects the ongoing transformation at the carmaker, which recently confirmed its 2025 financial outlook with an operating margin around 6.5% and free cash flow between 1 and 1.5 billion euros. The energy sector is also contributing to the upward movement with Engie climbing 1.27% to 22.28 euros, while STMicroelectronics gains 1.21% to 22.18 euros after several analysts, including Oddo BHF and Mizuho Securities, revised their price targets upward on December 17 and 16, respectively. This positive momentum in industrial and cyclical stocks indicates a certain level of investor optimism about economic prospects, despite a still uncertain macroeconomic environment. However, trading volumes remain limited, as many fund managers have already completed their adjustments before the holidays.

Luxury and Materials Under Pressure at the End of the Session

In contrast, the luxury sector is taking a hit in this last session before the weekend, with Kering leading the declines at -2.50% to 302.55 euros. The owner of Gucci is under pressure despite announcing on December 11 the sale of Kering Beauté to L'Oréal, a deal expected to be finalized in the first half of 2026. On December 18, Oddo BHF initiated a neutral recommendation on the stock with a target of 322 euros. Hermès International fell by 1.96% to 2,102 euros, and L'Oréal dropped 1.30% to 371 euros, reflecting profit-taking after several favorable sessions for the sector. Saint-Gobain fell by 2.05% to 86.08 euros, after announcing on December 3 the cancellation of 4,243,098 treasury shares, thus reducing the total number of shares composing its capital to 495 million. Bernstein lowered its price target on December 18 from 100 to 95 euros while maintaining its market perform rating. ArcelorMittal also ended in the red with a decrease of 1.60% to 38.09 euros, despite positive analyst revisions such as Zacks, which raised its target from 45 to 48 euros on December 16. However, these sector declines do not fundamentally affect the overall stable orientation of the Paris index, which manages to maintain a tenuous balance between buyers and sellers during this period of reduced activity.

Year-End Anticipation Ahead of Upcoming January Meetings

The STOXX Europe 600 index hit a new all-time high while the CAC 40 rose by 0.8% to 8,150.6 points on Thursday, with a weekly gain of about 1%.
This performance comes as investors have processed multiple central bank decisions. The ECB kept its interest rates unchanged on Thursday, while the Bank of England cut its rates but remained cautious about the pace of future easing.
Markets now expect only a slim chance of further rate cuts in 2026. In the US, inflation data released on Thursday showed a sharper-than-expected slowdown in price increases, but traders remain cautious about its implications for the Fed's monetary policy.
The composition of the CAC 40 will change on December 22, 2025, with the exit of Edenred and the entry of Eiffage, a group specializing in construction and concessions.
This reshuffle will occur just before the year's end and may trigger some technical movements in these stocks. As trading resumes in early January, investors will closely watch the first economic indicators for 2026, especially the manufacturing PMIs, which will set the tone for industrial activity in both the eurozone and the US.
The year 2026 promises to be eventful with numerous geopolitical and monetary challenges expected to drive the markets from the very first days of January.