CAC 40 Shows Modest Gains by Midday, Thales and Safran Under Pressure

ArcelorMittal and STMicroelectronics Lead Gains in a Sluggish Paris Market

ArcelorMittal, the steel giant, leads the CAC 40 with a 1.46% increase to 38.98 euros, benefiting from a favorable momentum in a resilient metal sector. The group, which reported quarterly results in early November with a revenue of $15.657 billion for the third quarter of 2025 and an EBITDA margin of 9.6%, continues to project its investment forecasts for the year between $4.5 billion and $5 billion. Semiconductor manufacturer STMicroelectronics also advances by 1.13% to 22.33 euros, extending its recovery after several challenging months for the sector. The French-Italian group, which reported $3.19 billion in revenue for the third quarter, a 2% year-on-year decline, is aiming for revenues of around $11.75 billion for the entire 2025 fiscal year. Saint-Gobain completes the top three with a 1% increase to 86.84 euros, confirming the strength of industrial stocks in an otherwise stagnant market. Michelin and Publicis Groupe round out the list of significant gains, with respective increases of 0.97% and 0.95%, reflecting renewed interest in domestic stocks towards the end of the year.

Safran and Thales Impacted by Growing Peace Hopes in Ukraine

In contrast, defense stocks are experiencing a significant drop midway through the day. Safran is down 1.37% to 295.20 euros, while Thales falls 1.36% to 225.50 euros, marking the steepest declines in the CAC 40. This underperformance by aerospace and defense giants comes amid a shifting geopolitical landscape. Optimistic statements from U.S. President Donald Trump about a potential resolution to the Ukrainian conflict are raising questions about the future of European military budgets and the sustainability of arms orders. Yet, Thales had reported a strong third quarter performance with nine-month revenues of 15.256 billion euros, an increase of 8.4% year-on-year, and reaffirmed its annual targets for organic growth between 6% and 7%. The group is also maintaining its forecast for an adjusted EBIT margin between 12.2% and 12.4%, but these robust fundamentals were not enough to counter the headwinds caused by expectations of easing tensions in the Russia-Ukraine conflict. Following these two heavyweights, AXA drops 0.78% to 40.82 euros, Legrand falls 0.59% to 126.55 euros, and Danone is down 0.52% to 76.48 euros, reflecting investor caution toward defensive stocks despite their recent strong operational performances.

A Mixed Year-End for the Paris Market Ahead of Final Adjustments

This Monday, December 29 session unfolds in an exceptionally calm market environment, a characteristic often observed between the year-end holidays. Since January 1, the CAC 40 has risen by approximately 9.8%, a respectable performance but significantly lagging behind the indices of Milan, Frankfurt, or Madrid, which have surged by more than 30%, 20%, and nearly 50%, respectively. Investors are taking advantage of this lull to evaluate a 2025 marked by intermittent volatility, persistent trade tensions, and recurring geopolitical risks. The Paris Stock Exchange will only open for two sessions this week: Monday and Tuesday, December 30, followed by a half-session on Wednesday, December 31, with an early close at 2:05 PM, as was the case on December 24. In the coming days, market attention is expected to focus on the final year-end adjustments and the first signals for the 2026 fiscal year, within a macroeconomic context still characterized by resilient economic conditions and the accommodating monetary policy of the European Central Bank. The outlook for the coming year remains mixed, with optimism fueled by the anticipation of earnings growth for European companies, alongside concerns about French political instability and international trade tensions that could impact the margins of CAC 40 companies.